What is one main difference in cash flow analysis between REITs and standard companies?

The main difference in cash flow analysis between Real Estate Investment Trusts (REITs) and standard companies lies in the focus of the cash flow analysis. REITs analyze cash flow primarily from specific properties because their revenue is derived from rental income and property appreciation. This means that cash flow assessments require a detailed look at how each property contributes to overall income, including factors such as occupancy rates, rental agreements, and property management efficiencies.

In contrast, standard companies may have a more diverse range of revenue streams and do not typically focus on singular assets in the same manner as REITs. They may generate income from various products and services, and their cash flow analysis could incorporate factors beyond just physical assets.

This emphasis on property-specific cash flows is crucial for assessing the health and performance of REITs, making it a fundamental difference between their cash flow analysis methods and those used by typical companies.