Cash Flow Return on Investment - CFROI


DEFINITION of 'Cash Flow Return on Investment - CFROI'

A valuation model that assumes the stock market sets prices based on cash flow, not on corporate performance and earnings.

Cash Flow Return on Investment (CFROI)

BREAKING DOWN 'Cash Flow Return on Investment - CFROI'

It's valuable to consider as many models as possible when looking at the stock market. Financial theory is similar to scientific theory; no model can be entirely proved or disproved, and a diversity of opinions is encouraged

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  1. Do you discount working capital in net present value (NPV)?

    Net present value (NPV) calculations should include the discounted value of changes in working capital. This treatment of ... Read Full Answer >>
  2. How is working capital different from fixed capital?

    There are several key differences between working capital and fixed capital. Most importantly, these two forms of capital ... Read Full Answer >>
  3. How can working capital affect a company's finances?

    Working capital, or total current assets minus total current liabilities, can affect a company's longer-term investment effectiveness ... Read Full Answer >>
  4. What are working capital costs?

    Working capital costs (WCC) refer to the costs of maintaining daily operations at an organization. These costs take into ... Read Full Answer >>
  5. Do you include working capital in net present value (NPV)?

    Working capital is included in calculating the net present value (NPV) of a company. NPV is the difference between the present ... Read Full Answer >>
  6. How do I read and analyze an income statement?

    The income statement, also known as the profit and loss (P&L) statement, is the financial statement that depicts the ... Read Full Answer >>

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