After-tax cash flow in real estate refers to the net cash flow from an income-producing property after accounting for income taxes. It includes the tax savings from any losses that can be offset against other income.
Before-Tax Cash Flow (BTCF) represents the cash generated by an asset or a business before deducting income tax payments or adding income tax benefits. It's a critical measure for assessing an investment's or business's potential earnings and operational efficiency.
Burn rate is the speed at which a company is spending its cash. Particularly applicable to start-up enterprises, which may not generate enough new cash flow to offset their rate of spending.
A detailed analysis of expected cash inflows and outflows over a specific period, crucial for managing liquidity and ensuring a business can meet its obligations.
In the manufacturing industry, the cash cycle represents the interval between the outlay of cash to procure raw materials and the receipt of payment for the manufactured goods produced from them.
Cash disbursement refers to the amount of money paid out by a business or individual during a specific period for expenses, purchases, or other financial obligations.
Cash flow refers to the movement of cash into and out of a business, reflecting the inflows and outflows of capital within a specified period. It is a critical indicator of a company's financial health and sustainability.
The Cash Flow to Capital Expenditure (CapEx) Ratio analyzes a company's ability to maintain its plant and equipment using cash generated from its operations, excluding dividends, rather than relying on external borrowing.
A ratio for assessing the solvency of a company, calculated by dividing the cash flow from operations by the total liabilities. It indicates a company's ability to satisfy its debts.
Cash management involves the planning, monitoring, and execution of a firm's policy regarding liquidity to ensure adequate availability of cash for operational needs, investment opportunities, and unforeseen expenses.
Cash Throw-Off, often used interchangeably with Cash Flow, refers to the net amount of cash generated and available for use after accounting for cash outflows.
Days' Sales Outstanding (DSO) is a financial metric that indicates the average number of days it takes for a company to collect payment after a sale has been made.
Debt service refers to the cash required in a given period, usually one year, for payments of interest and current maturities of principal on outstanding debt. This includes obligations from mortgage loans, corporate bond issues, and government bonds. Understanding debt service is crucial for assessing the financial stability and repayment ability of an individual or entity.
Debt service coverage is a critical financial metric used in corporate, government, personal, and real estate finance to measure the availability of cash flow for meeting annual debt obligations.
Debtor Collection Period, also known as Average Collection Period, is the average time it takes for a business to collect the money owed to it by its trade debtors. This period is critical for managing cash flow effectively.
The discount factor, also known as the present-value factor, is a figure used to determine the present value of future cash flows by considering the time value of money and a specific hurdle rate.
EBITDA is a measure of a company's overall financial performance and is used as an alternative to net income in some circumstances. It focuses on the earnings generated from the core business operations by excluding interest, taxes, depreciation, and amortization expenses.
The Equity Yield Rate measures the rate of return on the equity portion of an investment, accounting for periodic cash flow and proceeds from resale, but excluding income taxes.
A financial statement is a written record of the financial status of an individual, association, or business organization. It includes a balance sheet, an income statement (or operating statement or profit and loss statement), and may also include a statement of changes in working capital, net worth, and cash flow.
Free depreciation is a method of granting tax relief to organizations by allowing them to charge the cost of fixed assets against taxable profits in whatever proportions and over whatever period they choose. This provides considerable flexibility for businesses in managing their cash flow and tax liabilities.
Denoting the position of a company lacking sufficient cash, or assets that can be quickly converted into cash, to meet the demands of creditors.
Income property refers to real estate acquired specifically for the income or cash flow it generates. It can be owned individually, by a company, or be part of a limited partnership, with buyers often aiming for long-term capital gains upon sale.
An income stream refers to the regular flow of money generated by a business or investment, essential for evaluating financial health and planning future strategies.
An interest rate that gives a net present value (NPV) of zero when applied to a projected cash flow of an asset, liability, or financial decision.
Invoice Discounting is a financial practice wherein a business sells its invoices to a third party, typically a factoring house, at a discount to obtain immediate cash. It differs from traditional factoring in that it does not typically include sales accounting and debt collecting services.
A level-payment income stream is a series of equal cash flows received or paid at regular intervals over a specified period. Often associated with annuities, it ensures a constant amount of payment or income in each period.
Lock box services are advanced cash management systems used to streamline the collection and processing of receivables to enhance a company's cash flow efficiency.
Monetary assets and liabilities represent specific sums of money that are either receivable or payable, captured in a company's financial statements, including cash, bank balances, loans, debtors, and creditors.
Multiple solution rates refer to various rates of return that can be computed in certain appraisal scenarios using the Internal Rate of Return (IRR) method, particularly when cash flows vary between positive and negative values.
The operating cycle is the average period of time between acquiring inventory and receiving cash from its sale, reflecting the time required for a business to turn its investments into cash flows.
Operating statements are financial reports detailing the cash flow of a business or property. These reports are crucial for understanding the financial performance and health of the entity.
Overtrading occurs when a business expands its operations too rapidly, straining its financial resources and potentially causing liquidity problems.
The Payback Period Method is a capital budgeting technique that calculates the time required for projected cash inflows to equal initial investment expenditure, often used to gauge project risk.
A projection is an estimate of future performance made by economists, corporate planners, and credit and securities analysts to anticipate economic and financial conditions.
An accounting method that records transactions based on the actual receipt or payment of cash rather than when the transaction occurs.
A Statement of Change in Financial Position is a financial report that provides detailed information about a company's sources and applications of funds over a specific period.
Trade debtors, also known as trade receivables, represent amounts owed to a business by its customers for goods or services delivered or used but not yet paid for. It is a key component in the working capital of a business.
