Funds From Operations Calculator
Calculate FFO for REIT analysis and real estate investment trust performance evaluation
Calculate Funds From Operations
Bottom line profit from income statement
Non-cash depreciation and amortization expenses
One-time gains from selling properties
One-time losses from selling properties
Income from financial activities (excluded from FFO)
Funds From Operations Results
FFO Components Breakdown
Formula: FFO = Net Income + D&A + Losses - Gains - Interest Income
Net Property Impact: $0 (Gains - Losses)
Assumptions: 1M shares outstanding, $50 stock price for yield calculation
FFO Analysis
REIT Alpha Example
Financial Data
Net Income: $500,000
Depreciation & Amortization: $150,000
Property Gains: $125,000
Property Losses: $80,000
Interest Income: $75,000
FFO Calculation
FFO = Net Income + D&A + Losses - Gains - Interest Income
FFO = $500,000 + $150,000 + $80,000 - $125,000 - $75,000
FFO = $530,000
FFO Components
Net Income
Bottom line profit
Starting point for FFO calculation
D&A
Depreciation & Amortization
Add back non-cash expenses
Property Losses
One-time losses from sales
Add back non-recurring losses
Property Gains
One-time gains from sales
Remove non-recurring gains
Interest Income
Financial activity income
Exclude non-operational income
REIT Analysis Tips
Compare FFO across similar REITs for relative valuation
Higher FFO generally supports stronger dividend payments
FFO is more relevant than net income for REITs
Consider AFFO (Adjusted FFO) for maintenance costs
Evaluate FFO growth trends over multiple periods
Understanding Funds From Operations (FFO)
What is FFO?
Funds From Operations (FFO) is a key metric for analyzing Real Estate Investment Trusts (REITs). It provides a clearer picture of a REIT's operating performance by excluding non-recurring items and accounting for the unique nature of real estate investments.
Why Use FFO for REITs?
- •Properties often appreciate rather than depreciate
- •Excludes one-time property sale gains/losses
- •Better indicator of dividend sustainability
- •Industry standard for REIT comparison
FFO Formula Breakdown
FFO = NI + D&A + Losses - Gains - Interest Income
- NI: Net Income from operations
- D&A: Depreciation and Amortization (non-cash)
- Losses: One-time losses from property sales
- Gains: One-time gains from property sales
- Interest Income: Non-operational financial income
AFFO (Adjusted FFO): Some analysts also calculate AFFO, which further adjusts for recurring maintenance capital expenditures and straight-lining of rents.