AFFO Calculator

Calculate Adjusted Funds From Operations (AFFO) for REITs and analyze key performance metrics including FFO, AFFO per share, AFFO yield, and payout ratios.

Net Income ($)

Depreciation & Amortization ($)

Gains/Losses from Property Sales ($)

Recurring Capital Expenditures ($)

Straight-line Rent Adjustments ($)

Leasing Costs & Commissions ($)

Shares Outstanding

Stock Price ($)

Annual Dividend per Share ($)

Understanding AFFO

What is AFFO?

Adjusted Funds From Operations (AFFO) is a financial metric used to evaluate the performance and cash flow generation of Real Estate Investment Trusts (REITs). It refines FFO by accounting for recurring capital expenditures and other adjustments, providing a more accurate picture of sustainable, distributable cash flow to shareholders.

FFO vs AFFO

FFO (Funds From Operations): Net income + Depreciation/Amortization - Gains from property sales. Standard REIT performance metric.
AFFO: FFO - Recurring CapEx - Straight-line rent adjustments - Leasing costs. More conservative measure of cash flow.

Key AFFO Components

Depreciation: Non-cash expense added back to net income
Property Sale Gains/Losses: Removed to focus on operational performance
Recurring CapEx: Regular maintenance and improvement costs subtracted
Straight-line Rent: Accounting adjustment for lease payments over time
Leasing Costs: Commissions and tenant improvement costs

Why AFFO Matters

AFFO is considered the most accurate measure of a REIT's true cash-generating ability and dividend sustainability. It helps investors assess whether a REIT can maintain or grow its dividend payments, evaluate the REIT's valuation through AFFO yield, and compare performance across different REITs in similar sectors.

AFFO Analysis Tips

Payout ratio below 80%: Generally indicates sustainable dividends with room for growth
Payout ratio 80-95%: Dividends are sustainable but with limited growth potential
Payout ratio above 95%: May indicate dividend risk or aggressive distribution policy
Compare AFFO yield to sector peers: Higher yields may indicate value or increased risk
Track AFFO growth over time: Consistent growth suggests strong operational performance
Watch for AFFO manipulation: Compare company's AFFO calculation methodology to industry standards
Consider property type differences: Different REIT sectors have varying CapEx requirements

Note: This AFFO calculator provides estimates for Real Estate Investment Trust (REIT) analysis. AFFO calculations may vary between companies based on their specific methodologies and adjustments. Different REITs may include or exclude certain items from their AFFO calculations. This calculator uses standard AFFO formulas but actual reported figures may differ. AFFO is not a GAAP measure and should be used alongside other financial metrics. This calculator is for educational purposes and should not be considered investment advice. Always review a REIT's investor presentations and financial statements for their specific AFFO calculation methodology.

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