Operating Cash Flow
Cash generated from core business operations.
Operating cash flow (OCF) measures the cash generated by a company's normal business operations, excluding investment and financing activities. It starts with net income and adjusts for non-cash items (depreciation, changes in working capital). Consistently positive OCF indicates the business model is fundamentally sound and self-sustaining.
Example
A retail store reports $30,000 net income but $45,000 in operating cash flow after adding back $10,000 in depreciation and $5,000 from reduced inventory levels.
Why It Matters for Your Business
Operating cash flow reveals whether your core business generates enough cash to sustain itself, independent of loans or asset sales.
Related Terms
More Cash-flow Terms
Burn Rate
The rate at which a company spends cash monthly.
Cash Flow
The movement of money in and out of a business.
Cash Flow Forecast
A projection of expected cash inflows and outflows.
Cash Flow Statement
A financial statement showing cash movements from operations, investing, and financing.
Free Cash Flow
Cash from operations minus capital expenditures.
Related Financial Guides & Resources
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