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Operating Cash Flow

What is Operating Cash Flow (OCF)?

Operating cash flow describes how money moves into and out of a company. Otherwise known as “net cash generated from operations” or “cash flow from operating activities,” this is often the first metric appearing on a business’s cash flow statement.

Revenue from interest and investments is not included in operating cash flow. If a business has excellent operating cash flow, it should be able to support its activities without outside investments or extra loans.

To calculate operating cash flow, follow this formula:

Operating cash flow = net income + change in working capital + non-cash expenses

Related terms

Accounts Payable Turnover
Accounts payable turnover explains how many times a business pays its creditors in a set timespan. Companies can use this metric to measure their short-term liquidity.
Accounts Receivable Turnover
The accounts receivable turnover ratio (or debtor turnover ratio) allows businesses to evaluate their debt collection efficiency.
Advanced Electronic Bank Payments
Advanced electronic bank payments typically refer to sophisticated electronic payment methods and systems that enable businesses to execute various types of transactions with their banks electronically, often leveraging advanced technologies and automation capabilities.
Advanced Inventory
Advanced inventory refers to a comprehensive and feature-rich inventory management system or module within an enterprise resource planning (ERP) software or inventory management software.
Advanced Reporting
Advanced reporting refers to a sophisticated approach to generating and analyzing reports using advanced tools, techniques, and technologies.
Advanced Revenue Management (ARM)
Advanced Revenue Management (ARM) refers to a set of strategies and practices used by businesses to automate, streamline, and ensure accurate revenue recognition according to accounting standards.