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

What's the difference between free cash flow and operating cash flow?
Learn the difference between free cash flow and operating cash flow. Explore how analysts use earnings and cash flow when ... 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?
See how cash flow and fund flow differ from each other, and why fund flow can be used very differently by accountants and ... Read Answer >> 
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?
Understand how a negative cash flow from investing activities should be evaluated. Learn the sources and uses of cash in ... Read Answer >> 
What are some examples of how cash flows can be manipulated or distorted?
Read about some of the most common accounting techniques that can be used to manipulate the operating cash flow on a company's ... Read Answer >>