CFROI or cash flow return on investment is a rate of return that measures the performance of corporation based on its cash flow generation ability. CFROI is not very popular but is still used by some companies and basically it means the IRR of operating cash flow which is adjusted by inflation. Because of this adjusting CFROI is also compared to the real cost of capital which is equal to nominal cost of capital less expected inflation.
Free cash flow yield is another ratio which is used by investors to measure company’s cash flow in relation to its market value.
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