Operating Cash Flow
Definition - What does Operating Cash Flow mean?
A company's operating cash flow is the amount of money it makes from its operations minus the money that it spends on operating expenses.
Insuranceopedia explains Operating Cash Flow
Operating cash flow is an important measure of whether a business is thriving or not. A company has a positive cash flow when it generates enough income to pay for its expenses and derive a profit. A negative cash flow, on the other hand, indicates that the expenses outweigh the funds acquired.
While operating cash flow is an important consideration for the organization and its investors, it is important to note that it does not give a complete picture of the company's financial health. For one thing, it does not factor in future income or accounts receivable.
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