Overview

Operating cash flow ratio is a liquidity ratio used to assess a company's ability to meet its short-term obligations with the cash flow resulting from operating activities. It can also be interpreted as the number of times a company is able to pay off its short-term liabilities. The formula for calculating operating cash flow ratio is as follows:

Operating Cash Flow Ratio = Cash Flow from Operations / Current Liabilities

Where:

Cash Flow From Operations = Net Income + Non-Cash Expenses + Changes in Working Capital

Current Liabilities = Short-term obligations due within one year, e.g. short-term debt, accounts payable, and accrued liabilites.

Share
Reviews Add a review
No reviews yet

More From Corporate Finance Institute®

Browse our top rated business templates. See All
Energy Industry Comps Template Energy Industry Comps Template
763
49
This energy industry comps template provides a guideline and example of what a comparables universe would look like for a…
Financial Institution Dividend Discount Model
1,378
60
The financial institution dividend discount model uses future dividends to find the implied share price. This model is based on…
Loan Payment Calculator
1,030
0
The loan payment calculator allows users to determine the principal and interest payment each month until the full balance of…
DDM - Excel Dividend Discount Model Template
1,168
86
The dividend discount model template allows investors to value a company base on future dividend payments. This is based on…
Non-directional trading strategy template Non-directional Trading Strategies Template
992
0
The non-directional trading strategies template allow users to determine the profit when buying options. This template focuses on non-directional strategies…
restructuring financial model template preview 1 Restructuring Financial Model Template
1,315
0
This restructuring financial model template is used to demonstrate the financial interactions behind the restructuring process. Adjust this model to…
See All