Operating Cash Flow Ratio

What Does Operating Cash Flow Ratio Mean?
A measure of how well current liabilities are covered by the cash flow generated from a company's operations.

Formula:

Investopedia explains Operating Cash Flow Ratio
The operating cash flow ratio can gauge a company's liquidity in the short term. Using cash flow as opposed to income is sometimes a better indication of liquidity simply because, as we know, cash is how bills are normally paid off.

Filed Under: Formulas

Related Terms

Cash Flow
Current Liabilities
Income
Liquidity
Liquidity Ratios
Operating Cash Flow - OCF
More Related Terms

Related Links

Operating Cash Flow: Better Than Net Income? - Differences between accrual accounting and cash flows show why net income is easier to manipulate.
The Essentials Of Cash Flow - Tune out the accounting noise and see whether a company is generating the stuff it needs to sustain itself.
Advanced Financial Statement Analysis - Learn what it means to do your homework on a company's performance and reporting practices before investing.
Cash Flow On Steroids: Why Companies Cheat - Pressure to be the best can sometimes push corporations to cheat. Learn how they do it and how to spot it.

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