Cash-on-cash return: Measuring Cash Return on Cash Invested
Cash-on-cash return relates annual pre-tax cash flow to the cash invested. It can reveal how financing changes the return on the investor's own contribution.
Use the Cash-on-cash return Calculator to enter your own figures and compare the result with the worked example below.
Cash-on-cash return formula
Cash-on-cash return = Annual pre-tax cash flow ÷ Cash invested
Worked example
| Item | Example value |
|---|---|
| Annual pre-tax cash flow | 8000 USD |
| Cash invested | 80000 USD |
| Cash-on-cash return | 10% |
These are illustrative inputs, not current prices, rates or recommended targets. Where a currency is shown, keep all comparable money amounts in the same currency; conversion examples identify the two sides separately.
How to interpret the result
Leverage can amplify losses as well as returns. Include relevant acquisition cash and use cash flow after the financing costs being assessed.
Related calculations
Method and further reading
The example follows the FinMathly calculator method. For broader background, see CFPB: Building a budget. The background resource may use jurisdiction-specific terms; it does not replace the assumptions of this calculator.
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