How do you calculate funds from operations (FFO)?

Funds from operations (FFO) is the actual amount of cash flow generated from a company’s business operations. To calculate the net FFO, one must add the non-cash expenses or losses that are not actually incurred from the operations, such as depreciation, amortization, and any losses on the sale of assets, to net income.

What is funds from operations?

Funds from operations can be defined as the difference between the inflow of funds in the form of expenses. Funds from operations are the largest source of funds used for the repayment of loans, purchase of assets, and the payment of dividends, taxes, and others. How is Funds From Operations (FFO) calculated?

What is funds from operations (FFO)?

Funds from operations is 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. FFO excludes one-time cash inflows such as income from the sale of an asset; instead, it only includes income from business activities.