Summary
Operating Cash Flow measures the net cash generated or used by a company’s main business activities during a reporting period.
It adjusts reported profit for non-cash items and movements in working capital.
Why it matters
Positive Operating Cash Flow can support investment, dividends, debt repayments, and business growth. It also helps investors assess whether reported profits are being converted into cash.
How to read it
Consistently positive Operating Cash Flow is generally a positive sign. Persistent negative cash flow may require closer investigation.
Compare Operating Cash Flow with Net Income to help assess the quality and sustainability of earnings.