💵 Operating Cash Flow Calculator
Calculate operating cash flow (OCF)
Positive for increase, negative for decrease (optional, default 0)
How to Use This Calculator
Enter Net Income
Input the net income from the income statement - profit after all expenses and taxes.
Enter Depreciation and Amortization
Enter depreciation and amortization expenses - non-cash expenses that reduce net income but don't affect cash flow, so they're added back.
Enter Change in Working Capital (Optional)
Optionally enter the change in working capital - positive for increase (reduces cash flow), negative for decrease (increases cash flow). If omitted, defaults to 0.
Review Operating Cash Flow
See the operating cash flow - the cash generated from core business operations. Operating cash flow shows the cash-generating ability of operations and is a key metric for financial analysis.
Formula
Operating Cash Flow = Net Income + Depreciation + Amortization - Change in Working Capital
Example Calculation:
If net income $300,000, depreciation $50,000, amortization $20,000, change in working capital $10,000:
• Operating cash flow = $300,000 + $50,000 + $20,000 - $10,000 = $360,000
• This is the cash generated from operations
About Operating Cash Flow Calculator
An operating cash flow calculator helps you calculate the cash generated from core business operations. Operating Cash Flow = Net Income + Depreciation + Amortization - Change in Working Capital. Operating cash flow shows the cash-generating ability of operations and is a key metric on the cash flow statement. It's considered one of the most important financial metrics because it shows actual cash generation from operations, which is essential for business survival and growth. Positive operating cash flow indicates the business is generating cash from operations.
When to Use This Calculator
- Cash Flow Analysis: Analyze cash generation from operations
- Financial Analysis: Assess cash-generating ability
- Business Valuation: Calculate operating cash flow for valuation
- Performance Evaluation: Evaluate operational cash performance
Understanding Operating Cash Flow
- Cash Generation: Measures cash generated from operations
- Operating Focus: Focuses on operating activities only
- Key Metric: One of the most important financial metrics
- Business Health: Indicates business cash-generating ability
Why Use Our Calculator?
- ✅ Cash Flow Analysis: Calculate operating cash flow accurately
- ✅ Financial Analysis: Assess cash-generating ability
- ✅ Business Valuation: Calculate OCF for valuation
- ✅ Performance Evaluation: Evaluate cash performance
- ✅ 100% Free: No registration or payment required
Frequently Asked Questions
What is operating cash flow?
Operating cash flow is the cash generated from core business operations. Operating Cash Flow = Net Income + Depreciation + Amortization - Change in Working Capital. Operating cash flow shows the cash-generating ability of operations and is a key metric on the cash flow statement. It's considered one of the most important financial metrics because it shows actual cash generation from operations, which is essential for business survival and growth. Positive operating cash flow indicates the business is generating cash from operations.
Why is operating cash flow important?
Operating cash flow is important because it: (1) Cash generation - shows actual cash generated from operations, (2) Business survival - essential for business survival and growth, (3) Financial health - indicates cash-generating ability, (4) Free cash flow - used to calculate free cash flow, (5) Business valuation - key input in valuation models, (6) Performance - better indicator than net income for cash performance. Operating cash flow is often considered more important than net income because it shows actual cash, not accounting profit.
What is change in working capital?
Change in working capital is the change in current assets minus current liabilities from one period to the next. It represents cash tied up or freed from working capital. Positive change means cash is tied up in working capital (inventory, receivables increase) - reduces operating cash flow. Negative change means cash is freed from working capital (inventory, receivables decrease) - increases operating cash flow. Change in Working Capital = (Current Assets - Current Liabilities) current period - (Current Assets - Current Liabilities) previous period.
Can operating cash flow be negative?
Yes, operating cash flow can be negative, which indicates the business is consuming cash from operations rather than generating it. Negative operating cash flow can occur when: (1) Net loss - business is losing money, (2) Working capital increase - significant increase in inventory or receivables, (3) Growth phase - heavy investment in operations, (4) Operational issues - problems with operations. Negative operating cash flow is concerning and may indicate financial stress, though it can be acceptable during growth phases if financed appropriately.