Cash Flow Return on Investment

Cash Flow Return on Investment - Cash flow return on investment, also known as CFROI is a valuation model which bases the stock price on a specific company's cash flows. The cash flow return on investment is calculated by diving cash flows by the market value of the type of capital employed. Capital employed refers to all fixed assets and all current assets less all current liabilities. Captial employed is known to mean the value of which the asset contributes to a company's ability to make revenue. Revenue in this sense can come in many forms, provided they are asset based.