Operating Cash Flow Demand - OCFD


DEFINITION of 'Operating Cash Flow Demand - OCFD'

A measure of the amount of operating cash flow needed to meet the capital costs of a company's strategic investments. This value is used to compute the cash value added of a company's strategic investments and operations.

BREAKING DOWN 'Operating Cash Flow Demand - OCFD'

A strategic investment is any investment in a game plan. The operating cash flow demand is the amount of cash flow needed for each strategic investment to have a net present value of zero, or achieve minimum profitability. For example, if a company's strategic investment is the purchase of a plant in a new market, the OCFD would be the minimum amount of cash that the plant would need to generate over its life to meet the return required by investors.

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  4. Cash Value Added - CVA

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  5. Adjusted Gross Income - AGI

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  1. Do you discount working capital in net present value (NPV)?

    Net present value (NPV) calculations should include the discounted value of changes in working capital. This treatment of ... Read Full Answer >>
  2. How is working capital different from fixed capital?

    There are several key differences between working capital and fixed capital. Most importantly, these two forms of capital ... Read Full Answer >>
  3. How can working capital affect a company's finances?

    Working capital, or total current assets minus total current liabilities, can affect a company's longer-term investment effectiveness ... Read Full Answer >>
  4. What are working capital costs?

    Working capital costs (WCC) refer to the costs of maintaining daily operations at an organization. These costs take into ... Read Full Answer >>
  5. Do you include working capital in net present value (NPV)?

    Working capital is included in calculating the net present value (NPV) of a company. NPV is the difference between the present ... Read Full Answer >>
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