Cash Flow - Before Tax and After Tax
Cash Flow Before Tax (CFBT) is a measure of cash available before consideration of taxes and is simply net operating income (NOI) minus debt service (DS). This measure of cash flow is important in the investment community because it provides the return available after the debt has been serviced but before the effect of tax (shelter) has been considered.
Cash Flow After Tax (CFAT) is a measure of spendable cash from the investment after deductions are made for taxes. CFBT minus Taxes equals CFAT. To arrive at this figure, however, requires a separate tax calculation.
NOI – Interest – Depreciation – Amortized Costs = Taxable Income
and,
Taxable Income x Marginal Tax Rate = Taxes Payable or (Tax Savings)
and,
CFBT – Taxes Payable = CFAT
ProAPOD® Real Estate Investment Software automatically calculates both, before and after tax cash flow, based upon the property data entered on the forms. It is also recalculated automatically whenever the data is changed. From our website, you can preview all our real estate software features and real estate software reports. Go to www.proapod.com
