what s the difference between funds from operations and the cash flow from operations 
it may be easy to confuse a reit s funds from operations and the cash flow from operations but the two are different from one another the ffo represents the operating performance and takes net income depreciation amortization and losses on property sales into account while factoring out any interest income and gains from property sales the cash flow from operations on the other hand is reported on the cash flow statement it s the total amount of cash that a company earns during the course of its operations this includes working capital revenue and expenses the bottom linethere are a number of ways you can measure a company s success the metric depends on the type of corporation for instance some companies measure their profitability using ebitda or return on equity reits though use funds from operations this figure which measures the company s operating performance was established by nareit and is now an industry standard it takes into account depreciation amortization and losses on the sale of property while factoring out any interest earned along with the gains on property sales but don t worry you won t have to calculate this figure you can find it in the footnotes of the reits income statement 