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.

How do I calculate funds from operations?

If you do need to calculate funds from operations, start by collecting all data needed from an income statement. This is the REIT's profit, or "bottom line," which can be found at the bottom of the income statement. These items can be found in the operating expenses section of the interest statement.

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.