What is a 'Cash Flow Return on Investment  CFROI'
A cash flow return on investment (CFROI) is a valuation model that assumes the stock market sets prices based on cash flow, not on corporate performance and earnings.
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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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RELATED FAQS

Free & operating cash flows: What's the Difference?
Learn the difference between free cash flow and operating cash flow. Explore how analysts use earnings and cash flow to evaluate ... Read Answer >> 
What is the formula for calculating free cash flow?
Read about some of the formulas for free cash flow, why investors perform cash flow analysis and what a high or rising cash ... Read Answer >> 
What is the difference between cash flow and fund flow?
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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 ... Read Answer >> 
How should I evaluate a company with negative cash flow investing activities?
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What are some examples of how cash flows can be manipulated or distorted?
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