Cash Flow from Operations

What is Cash Flow from Operations?

Cash flow from operations measures the money a business generates from day-to-day activities, usually over a quarter or fiscal year. You can use this formula to find your company’s cash flow from operations:

Cash flow from operations = net income + non-cash items + changes in working capital

While cash flow from operations can give you a quick overview of your business’s income, it doesn’t always paint a complete picture of a company’s financial situation. For example, this figure omits costs associated with buying and maintaining fixed assets.

Related terms

3 Way Match

3-way matching refers to a three-step process of matching three key documents before processing a payment to a supplier.

ASC 606

Accounting Standards Codification (ASC) 606 is a standard framework for revenue recognition developed by the Financial Accounting Standards Board (FASB) for companies operating within the United States.

Account Reconciliation

Account reconciliation is the process of comparing two sets of records to ensure their accuracy and consistency.

Accounts Payable

Accounts payable (AP) refers to the amount of money that a business owes to its suppliers or creditors for goods or services purchased on credit.

Accounts Payable Automation

Accounts payable automation (AP Automation) refers to the use of technology and software solutions to streamline and optimize the accounts payable process within an organization.

Accounts Payable Days

Accounts Payable Days (AP Days), also referred to as Days Payable Outstanding (DPO), is a financial ratio that measures the average time a company takes to pay its suppliers or vendors for credit purchases.