So, if you purchase a property using 80 % borrowed money and 20 % cash, the cash
on cash return metric only uses the 20 % cash as the denominator.
Not exact matches
They ignore profitability
metrics such as
cash flow
return on invested capital (CFROIC) and revenue per employee.
For those investors focused
on returns, one
metric that we look at is the Bonus Rate, which measures how much of a
cash bonus we get for the dollars we invest with the online brokerage.
In fact, just about all financial
metrics have a positive trend over the past 10 years including margins, revenue,
return on capital, and free
cash flow just to name a few.
The majority of Tildenrow's ideas are generated from a quantitative screen based
on free
cash flow as a percentage of enterprise value, and
on the
metric return on invested capital (ROIC).
However, considering current
metrics, I consider the short term
return / attraction of a buyback is fairly even balanced against the potentially higher
returns on offer from a (gradual) investment of their
cash into distressed assets.
After creating a real estate proforma, our real estate analysis software will automatically calculate useful financial
metrics such as IRR, NPV,
cash on cash return, gross rent multiplier, debt service coverage, breakeven occupancy, and more.
This is where some basic
metrics like Cap Rate and
Cash -
on -
Cash return are critical.
I think
cash on cash return is a great
metric to use to evaluate a potential deal because it is quick and easy allowing you to figure out the potential
return of an investment in no time at all.
Return: This
metric is similar to
Cash on Cash Return.
Also, depending
on what you plan to do with the property, if it's a flip or rental unit (s), etc. and how you are financing determine different
metrics you should be looking at in addition to
cash on cash return.