Business glossary
Operating cash flow
Cash generated or used by normal business operations during a period.
Example
A business collects $8,000 from customers and pays $5,000 of operating outgoings in a simplified period. These transactions produce $3,000 operating cash flow before other adjustments.
How it differs from related terms
Operating cash flow relates to ordinary business activities. Financing and investing cash flows include items such as loans and asset purchases. A positive operating result does not automatically cover capital expenditure or debt repayments.
Frequently asked questions
What is an example of operating cash flow?
A business collects $8,000 from customers and pays $5,000 of operating outgoings in a simplified period. These transactions produce $3,000 operating cash flow before other adjustments.
How should operating cash flow be interpreted?
Operating cash flow relates to ordinary business activities. Financing and investing cash flows include items such as loans and asset purchases. A positive operating result does not automatically cover capital expenditure or debt repayments.