Overview
This Funds From Operations Excel Template is an educational resource and has a sample calculation of FFO. FFO represent the amount of cash that is generated from the core business operations. This is an important metric to calculate as it is the core cash flow that a company can generate from its business. Fund from operations are particularly useful for companies that engage in Real Estate Investment Trusts (REITs), which are trusts that primarily operated on income-generating real estate transactions. Funds from operations is the actual amount of cash flow a company generates from its operations. It excludes all the expenses or loss which are not incurred from its operating activities, such as depreciation and amortization (D&A), gains or losses from the sale of assets, and interest income.

Formula for Funds From Operations

The Formula for FFO is as follows: FFO = Net Income + (Depreciation expense + Amortization expense + Losses on sale of assets) – (Gains on sale of assets + Interest income)

Importance of FFO in Real Estate

FFO is an important indicator of the operational efficiency for REIT companies. It is often used by investors as a benchmark for measuring financial performance of a real estate company.

Learn More About This Topic

Read CFI's guide on FFO to have a better grasp of its definition, application, and importance!  
Share
Reviews Add a review
No reviews yet

More From Corporate Finance Institute®

Browse our top rated business templates. See All
Financial Institution Dividend Discount Model
404
0
The financial institution dividend discount model uses future dividends to find the implied share price. This model is based on…
Loan Payment Calculator
274
0
The loan payment calculator allows users to determine the principal and interest payment each month until the full balance of…
DDM - Excel Dividend Discount Model Template
336
28
The dividend discount model template allows investors to value a company base on future dividend payments. This is based on…
Non-directional trading strategy template Non-directional Trading Strategies Template
329
0
The non-directional trading strategies template allow users to determine the profit when buying options. This template focuses on non-directional strategies…
restructuring financial model template preview 1 Restructuring Financial Model Template
565
0
This restructuring financial model template is used to demonstrate the financial interactions behind the restructuring process. Adjust this model to…
TMT Financial Model Template Preview TMT Financial Model Template
737
0
This TMT financial model template is used to value technology, media, and telecom firms. This model provides a template to…