A measurement of an investment’s performance often used in commercial real estate transactions, but not exclusively.  Sometimes expressed as cash-on-cash return, this cash yield differs from a return on investment (ROI) which includes the Total Return on investment.  

Unlike ROI that includes the total return on investment, cash-on-cash, or cash yield, only measures the return on the cash invested. 

The formula for cash-on-cash is: 

Cash on Cash Return = Annual Pre-Tax Cash Flow​ / Total Cash Invested, where: APTCF = (GSR + OI) – (V + OE + AMP)
GSR = Gross scheduled rent; OI = Other income; V = Vacancy; OE = Operating expenses; AMP = Annual mortgage payments​ 

Pertains to real estate, debt, and equity offerings. 


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