Cash Flow After Taxes - CFAT

AAA

DEFINITION of 'Cash Flow After Taxes - CFAT'

A measure of financial performance that looks at the company's ability to generate cash flow through its operations. It is calculated by adding back non-cash accounts such as amortization, depreciation, restructuring costs and impairments to net income.

Cash Flow After Taxes (CFAT)



Also known as "After-Tax Cash Flow".

INVESTOPEDIA EXPLAINS 'Cash Flow After Taxes - CFAT'

CFAT is important for investors because it gauges a corporation's ability to pay dividends. The higher the CFAT, the better positioned a business is to make distributions. CFAT also measures the company's financial health and performance over time and in comparison to competitors.

RELATED TERMS
  1. Depreciation

    1. A method of allocating the cost of a tangible asset over its ...
  2. Non-Cash Charge

    A charge made by a company against earnings, which does not require ...
  3. Dividend

    1. A distribution of a portion of a company's earnings, decided ...
  4. Net Income - NI

    1. A company's total earnings (or profit). Net income is calculated ...
  5. Cash Flow

    1. A revenue or expense stream that changes a cash account over ...
  6. Earned Premium

    The amount of total premiums collected by an insurance company ...
RELATED FAQS
  1. Are taxes calculated in operating cash flow?

    Learn how taxes are involved with the calculations for operating cash flow, and find out about the importance of operational ...
Related Articles
  1. Retirement

    The Essentials Of Corporate Cash Flow

    Tune out the accounting noise and see whether a company is generating the stuff it needs to sustain itself.
  2. Fundamental Analysis

    Taking Stock Of Discounted Cash Flow

    Learn how and why investors are using cash flow-based analysis to make judgments about company performance.
  3. Markets

    Cash Flow On Steroids: Why Companies Cheat

    Pressure to be the best can sometimes push corporations to cheat. Learn how they do it and how to spot it.
  4. Options & Futures

    Advanced Financial Statement Analysis

    Learn what it means to do your homework on a company's performance and reporting practices before investing.
  5. Markets

    Introduction To Fundamental Analysis

    Learn this easy-to-understand technique of analyzing a company's financial statements and reports.
  6. Investing

    Will Intuitive Surgical Shares Benefit Investors?

    Earlier this month, Intuitive Surgical authorized to repurchase up to $1 billion of its common stock. But will it actually benefit investors?
  7. Investing

    Is Caterpillar Here To Stay?

    Because Caterpillar is the largest construction and mining equipment manufacturer in the world, investors can count on it to keep paying dividends.
  8. Investing

    Is J.C. Penney Fighting An Uphill Battle?

    J.C. Penney's revenue is once again on the ascent, its free cash flow is closing in on positive territory, and its gross margin has rebounded sharply.
  9. Investing

    What Is The Real Picture Of Linn Energy?

    Numbers don't always tell the full story. Take, for example, the long-term chart for LINN Energy which was expected to be down more than 40%.
  10. Bonds & Fixed Income

    Figuring Out How To Cover Your Liability Bases

    Whenever we talk about the asset-liability approach to portfolio management (ALM), the concepts of immunization and cash flow matching come into play.

You May Also Like

Hot Definitions
  1. Sunk Cost

    A cost that has already been incurred and thus cannot be recovered. A sunk cost differs from other, future costs that a business ...
  2. Technical Skills

    1. The knowledge and abilities needed to accomplish mathematical, engineering, scientific or computer-related duties, as ...
  3. Prepaid Expense

    A type of asset that arises on a balance sheet as a result of business making payments for goods and services to be received ...
  4. Gordon Growth Model

    A model for determining the intrinsic value of a stock, based on a future series of dividends that grow at a constant rate. ...
  5. Cost Accounting

    A type of accounting process that aims to capture a company's costs of production by assessing the input costs of each step ...
  6. Law Of Supply

    A microeconomic law stating that, all other factors being equal, as the price of a good or service increases, the quantity ...
Trading Center