Funds from operations (FFO)

Funds from operations (FFO),

Definition of Funds from operations (FFO):

  1. FFO is calculated by adding depreciation and amortization to earnings and then subtracting any gains on sales. It is sometimes quoted on a per-share basis. The FFO-per-share ratio should be used in lieu of earnings per share (EPS) when evaluating REITs and other similar investment trusts.

  2. Funds from operations (FFO) refers to the figure used by real estate investment trusts (REITs) to define the cash flow from their operations. Real estate companies use FFO as a measurement of operating performance.

  3. The net income a REIT generates, not including losses or gains from property sales, and adding real estate depreciation back in. When compared to normal corporate accounting, it is a good approximation of cash flow and considered to be an even better judge of operations than Generally Accepted Accounting Principles, the standard for American public companies.

How to use Funds from operations (FFO) in a sentence?

  1. FFO excludes one-time cash inflows such as income from the sale of an asset; instead, it only includes income from business activities.
  2. Real estate companies use FFO as a measurement of operating performance.
  3. Funds from operations (FFO) refers to the figure used by real estate investment trusts (REITs) to define the cash flow from their operations.

Meaning of Funds from operations (FFO) & Funds from operations (FFO) Definition