what ffo can tell you
ffo is a measure of the cash generated by a reit real estate companies use ffo as an operating performance benchmark the national association of real estate investment trusts nareit originally pioneered this figure which is a non gaap measure the funds from operations measure the net amount of cash and equivalents that flows into a firm from regular ongoing business activities ffo should not be seen as an alternative to cash flow or as a measure of liquidity for example a typical company s cash flow would be influenced by the money earned from the sale of an asset but ffo excludes those gains also a typical company would show a cash inflow on its cfs if the company received loan proceeds from a bank however ffo does not include such cash inflows instead it is only a measure of the income from business activities 