Operating Cash Flow (OCF)

Operating cash flow (OCF) refers to the cash generated by a company’s core business operations, excluding long-term capital investments and financing activities. It indicates how well a company’s day-to-day activities generate enough cash to maintain and grow its operations. OCF is a crucial indicator of a company’s financial health, as it shows how efficiently the business converts sales into cash.

Example

A company’s operating cash flow statement shows $200,000 in cash generated from product sales after subtracting operating expenses like salaries and rent.