Tools > Learn about Perennial Crop Investment Tool > Net Cash Flow

Learn about Perennial Crop Investment Tool

book icon What is Net Cash Flow?

Net Cash Flow = Grower's Revenue – (Operating Costs + Capital Outlays)

Net Cash Flow represents the grower’s revenue minus operating costs (e.g., spraying cost) and capital outlays (e.g., planting trees).

Net Cash Flow will help you figure out the profitability of your orchard. In the early years, with establishment, planting and maintenance costs until one gets into production, we have substantial net cash outflows. We can see as the production starts to increase as the tree approaches maximum production (at about 10 years of age), Net Cash Flow (NCF) is positive and increasing. Ultimately, it plateaus and starts to decline as the productivity of the block declines.

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