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What is Operating Cash Flow (OCF)?

Operating Cash Flow (OCF)

Operating cash flow, or OCF, refers to the amount of cash generated by a company's general business operations. The figure refers to revenue that the company brings in and excludes any costs associated with long-term investment on capital items or securities.

Where have you heard about Operating cash flow (OCF)?

Calculating one's OCF is incredibly useful for any company, with public companies ordered to do so by Generally Accepted Accounting Principles (GAAP). Financial publications often report on companies' OCF with analysts and investors paying special attention to it.

What you need to know about Operating cash flow (OCF).

OCF can determine many things about a company including whether it is able to generate enough positive cash flow to maintain general operations, or whether it requires external financing. Operating cash flow concentrates on general cash inflows and outflows (salaries, services, selling and purchasing inventory etc.) and also includes various non-cash items such as amortisation, stock-based compensation and any incurred expenses that have not yet been paid for. A company's operating cash flow can be found on their cash flow statement, which also details cash flow from financing and investing.

Find out more about Operating cash flow (OCF).

Further understand OCF by reading our definitions of cash flow and cash flow statement.

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