All about Cash Flow Return on Investment
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CFROI Pros and Cons
Mehul Doshi Doshi, Premium Member
Cash flow is dynamic for an organization and can be different based on marketing and sales and does not give a correct picture.
For example: if the company has announced a special discount for prebookings the cash flow may look good, but may not reflect the exact state of the organization.
Alternatively if the company is using the cash for bulk buying and increased margin or bundling with another high margin portfolio is the true EVA parameter.
Hence Cash Flow ROI can give a point in time objective of the time or year but has to be balanced from other parameters which could be cyclic or business trust difference....
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