Cash-flow return on investment

Cash-flow return on investment (CFROI) is a valuation model that assumes the stock market sets prices based on cash flow, not on corporate performance and earnings. CFROI = Cash flow Market recapitalization {\displaystyle {\text{CFROI}}={\frac {\text{Cash flow}}{\text{Market recapitalization}}}} For the corporation, it is essentially internal rate of return (IRR).