Operating Cash Flow - OCF

What does it mean?
The cash generated from the operations of a company, generally defined as revenues less all operating expenses, but calculated through a series of adjustments to net income.

Also known as "cash flow provided by operations" or "cash flow from operating activities."

In Other Words...
This is the cash generated in the course of a company running its business. The OCF can be found on the statement of cash flows.

It's arguably a better measure of a business's profits than earnings, because a company can show positive net earnings and still not be able to pay its debts. It's cash flow that pays the bills!

You can also use OCF as a check on the quality of a company's earnings. If a firm reports record earnings but negative cash, it may be using aggressive accounting techniques.

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Related Terms
IFO | Net Operating Income | Non-Operating Cash Flows | Operating Expenses | Operating Income | Operating Margin

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