Operating Cash Flow Ratio


DEFINITION of 'Operating Cash Flow Ratio'

A measure of how well current liabilities are covered by the cash flow generated from a company's operations.


Operating Cash Flow Ratio


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BREAKING DOWN '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.

  1. Liquidity

    The degree to which an asset or security can be quickly bought ...
  2. Cash Flow

    The net amount of cash and cash-equivalents moving into and out ...
  3. Income

    Money that an individual or business receives in exchange for ...
  4. Income From Operations - IFO

    The profit realized from a business' own operations. Income from ...
  5. Operating Cash Flow - OCF

    Operating Cash Flow (or OCF) is a measure of the amount of cash ...
  6. Current Liabilities

    A company's debts or obligations that are due within one year. ...
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  1. What metrics can be used when evaluating a telecommunications company to ensure its ...

    Cash flow analysis has been transformed since the widespread introduction of statements of cash flow, and investors have ... Read Full Answer >>
  2. What is the difference between the operating the operating cash flow ratio and operating ...

    The operating cash flow ratio and the operating cash flow margin are different ratios used in fundamental analysis. The operating ... Read Full Answer >>
  3. What is the difference the operating cash flow ratio and solvency ratio?

    The operating cash flow ratio and the solvency ratio are two different measures used in fundamental analysis of a company. ... Read Full Answer >>
  4. How can I calculate the operating cash flow ratio on Excel?

    The operating cash flow ratio measures a company's short-term liquidity by relating its operational cash flow to its current ... Read Full Answer >>
  5. What does the operating cash flow ratio measure?

    The operating cash flow ratio measures a company's ability to meet its short-term, or current, liabilities, also known as ... Read Full Answer >>
  6. Can working capital be depreciated?

    Working capital as current assets cannot be depreciated the way long-term, fixed assets are. In accounting, depreciation ... Read Full Answer >>

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