Operating Cash Flow

What Does Operating Cash Flow Mean?

A company’s operating cash flow is the amount of money it generates from its core business operations, after deducting the expenses incurred in running those operations.

Insuranceopedia Explains Operating Cash Flow

Operating cash flow is a crucial indicator of a business’s performance. A company experiences positive cash flow when it generates sufficient income to cover its expenses and achieve a profit. Conversely, negative cash flow indicates that expenses exceed the funds generated.

While operating cash flow is an essential metric for both the organization and its investors, it is important to recognize that it does not provide a comprehensive view of the company’s financial health. For instance, it does not account for future income or outstanding accounts receivable.