What is 'Cash Flow After Taxes - CFAT'
Cash flow after taxes (CFAT) is 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.
Also known as "After-Tax Cash Flow".
BREAKING DOWN '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.