Operating cash flow (OCF) refers to the amount of cash a company generates from its operations.
Operating cash flow (OCF) = (A) EBIT + (B) Depreciation – (C) Taxes
EBIT = Revenue – Operating Expenses
EBIT = Operating Income
Direct Method
Operating Cash Flow = Total Revenue – Operating Expenses
Operating Cash Flow = Total income – Operating Expenses
Indirect Method
Operating Cash Flow = Net Income + Non-cash Expenses (Depreciation) +/- Changes in Working Capital
Operating Cash Flow = Net Income + Non-Cash Items + Net Change to Working Capital
Operating Cash Flow = Net Income + Non-cash Expenses +/- Changes in Assets & Liabilities
Understanding Operating Cash Flow Calculation
OCF Calculator:
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