Cash Flow Return on Investment

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Cash Flow Return on Investment

A model of determining the value of a company that assumes that the market sets prices based on cash flow instead of earnings. It is calculated thusly:

CFROI = Cash flow / Total investment.
References in periodicals archive ?
75 grade-point average (B on one-year stock return, a B for CFROI, a C on forecast CFROI and a B on sales growth).
As an example of Table l's use, consider a cash-flow return-on-investment (CFROI) metric where CFROI = operating cash flows/investment.
Yet Gillette still generates massive operating cash flow--as the CFROIs show--with phenomenally high returns that are well above its cost of capital or market averages.