Operating Cash Flow Calculator

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The indirect method is used on most company cash-flow statements. The direct method tracks actual cash in and out.
The after-tax profit from the income statement (bottom line).
Non-cash expense that reduces reported income but not actual cash.
Non-cash write-down of intangible assets such as patents or goodwill.
Positive means inventory grew (cash used). Negative means inventory shrank (cash freed).
Positive means more cash is owed to you but not yet collected (cash used). Negative means collections exceeded new sales on credit (cash freed).
Positive means you owe more to suppliers (cash conserved). Negative means you paid down payables faster (cash used).
Increase in taxes owed but not yet paid adds cash back; a decrease means cash was used to settle prior tax obligations.
Catch-all for items such as stock-based compensation, deferred revenue, or prepaid expenses not covered above.
Currency
Operating Cash FlowPositive OCF
$190,000

Net cash generated from core business operations

Change in Net Working Capital$37,000
Total Non-Cash Add-backs$33,000
OCF Margin1.6%
Operating Cash Flow$190,000
Non-Cash Add-backs$33,000
Working Capital Change$37,000

Operating cash flow is $190,000, indicating self-sustaining operations.

  • Positive operating cash flow confirms that core operations generate real cash, independent of financing or investing activities.
  • OCF exceeds net income by $70,000, largely because non-cash charges and favorable working capital movements convert more accrual profit into actual cash.
  • Depreciation and amortization add back $33,000 of non-cash charges that reduced reported income without using any cash this period.
  • Working capital movements contributed positively: payables grew faster than receivables and inventory, freeing cash.

Next stepSubtract capital expenditures from OCF to find Free Cash Flow, which shows how much is left for debt repayment, dividends, or reinvestment.

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