before-tax cash flow

Before-Tax Cash Flow

The cash flow a person or company realizes after subtracting debt service and other expenses but not tax liability. Before-tax cash flow represents cash available to pay off creditors in the event of liquidation. While it is an important measure, it is not as closely watched as earnings before interest and taxes.

before-tax cash flow

The amount of money generated by an investment after collection of all revenues and payment of all bills, but without any deductions for depreciation or other noncash items, and before calculation of income tax consequences. An important figure in analyzing any investment,because properties with high depreciation expenses may show tax losses but positive cash flows.In the alternative,a property that requires expensive financing for acquisition or operation may show good net income figures for accounting and tax purposes, but have a negative cash flow requiring the owner to supplement the property with money from other sources.