Operating cash flow (OCF) is a measure of the amount of cash generated by a company’s normal business operations.
Operating cash flow is important because it provides the analyst insight into the health of the core business or operations of the company.
Without a positive cash flow from operations a company cannot remain solvent in the long run.
Formula to calculate operating cash flow.
Suppose a company’s total revenue is $400,000 and its operating expense cost is $ 250,000. Calculate the company’s operating cash flow.
Therefore, the company’s operating cash flow is $ 150,000.