Funds from operations (FFO) is a measure of the cash flow generated by a real estate investment trust (REIT) or a property management company. It is calculated by adding depreciation and amortization to net income, and then subtracting any gains or losses on the sale of assets.
FFO is a more accurate measure of the cash flow generated by a REIT or property management company than net income, because it takes into account the non-cash expenses of depreciation and amortization. This makes FFO a more useful metric for investors who are interested in the financial performance of a REIT or property management company.