What is cash return?

Cash return is a strategy for determining the rate of return on the investment. Generally, the calculation of cash return on transport is used unless the secondary market is involved in the investment. This approach can be a great way to reflect the payback rate per month or quarterly base or set an annual dollar income that could be created for the overall dollar investment.

To understand how cash return works, it is useful to understand what the secondary market is and why this type of calculation will not work in this environment. The secondary market is a situation in which the investor buys certainty directly from another investor rather than buy security from the issuer. This added dimension to the transaction can add a layer of risk that cannot be easily taken into account in the usual process to determine the return to cash due to the presence of a third party in the financial transaction.

The calculation of the actual return on investment with access to return to cash is very simple. INThe essence of cash return will distribute the annual income of the dollar the total investment of the dollar. The result will be a percentage that will reflect the annual yield achieved for the initial investment in the asset. This can also be drilled to quarterly and monthly percentage with a little calculation if the investor wants to monitor the amount of return that is realized in shorter time frames.

Ideally, the determination of cash to play will lead to a relatively high percentage of annual yield. In the case of the chance, the investor will decide to say goodbye to the investment for a long time. At the same time, an investment that tends to generate a lower return for two periods may indicate that the investor will be well sold by the asset and invest on another occasion.