1. Traditional Measures of Investment Worth

2. Ratio Analysis Why is it important to ensure that properties are similar before relying too heavily on ratio analysis?

3. Income Multipliers Gross Income Multipliers GIM = Market Value / Effective Gross Income NIM = Market Value / Net Operating Income Gross Income Multipliers GIM = Market Value / Effective Gross Income NIM = Market Value / Net Operating Income

4. Financial Ratios Operating Ratio Operating Ratio = OE / EGI Break-Even Ratio Break-Even = (OE + DS) / EGI Debt-Coverage Ratio DCR = NOI / DS Operating Ratio Operating Ratio = OE / EGI Break-Even Ratio Break-Even = (OE + DS) / EGI Debt-Coverage Ratio DCR = NOI / DS

5. Traditional Profitability Ratios Overall Capitalization Rate Cap Rate = NOI / Market Value AKA the free-and-clear rate of return Equity Dividend Rate Equity Div. Rate = BTCF / Cash Investment Cash-on-Cash Return Cash-on-Cash = ATCF / Cash Investment Overall Capitalization Rate Cap Rate = NOI / Market Value AKA the free-and-clear rate of return Equity Dividend Rate Equity Div. Rate = BTCF / Cash Investment Cash-on-Cash Return Cash-on-Cash = ATCF / Cash Investment

6. Broker’s Rate of Return A more optimistic way of looking at things. = (ATCF + Equity Buildup) / Cash Investment Payback Period Payback = Cash Investment / Annual CF Advantages and disadvantages? Broker’s Rate of Return A more optimistic way of looking at things. = (ATCF + Equity Buildup) / Cash Investment Payback Period Payback = Cash Investment / Annual CF Advantages and disadvantages?