Cash earnings refer to the income that a business generates from its operations after accounting for cash revenues and cash expenses, specifically excluding noncash expenses such as depreciation.
Funds from operations (FFO) is a financial performance metric primarily used by real estate investment trusts (REITs) to define the cash generated by their operations. It specifically excludes the depreciation and amortization that obscures the actual cash earnings of these types of entities. FFO is essential to assess a REIT’s capability to pay dividends to its shareholders.
