Cash-on-Cash Return

Before tax cash flow (BTCF = CFO – Debt Service) divided by the total equity contribution to date, expressed on an annual basis as a percentage.

Cash-on-Cash Return = Before Tax Cash Flow ÷ Total Equity Contribution to Date

Learn when to use the Cash-on-Cash return

The Cash-on-Cash Return of an investment is important when looking at stablized cash flow on an annual basis. The Cash-on-Cash Return is typically used alongside other return metrics such as the Equity Multiple, Internal Rate of Return, and Free and Clear Return to appropriately assess an investment.


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