CASH-ON-CASH RETURN Definition

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CASH-ON-CASH RETURN is the ratio of annual before-tax cash flow to the total amount of cash invested, expressed as a percentage. It is often used to evaluate the cash flow from income-producing assets. It is generally considered a quick napkin test to determine if the property qualifies for further review and analysis. Cash on Cash analyses are generally used by investors looking for properties where cash flow is king, however, some use it to determine if a property is under priced, indicating instant equity in a property. It is calculated: Annual Before-tax Cash Flow divided by the Total Cash Invested.

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MAKER is a. the producer of a product, or, b. the person who signs a check or promissory note, which makes him/her responsible for payment.

ACCOUNTANTS OPINION is a signed statement regarding the financial status of an entity from an independent public accountant after examination of that entities records and accounts.

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