Operating Cash Flow Calculator
Calculate operating cash flow from net income, depreciation and amortization, and the change in working capital.
$
$
$
A positive number here reduces operating cash flow; a negative number increases it
Result
Operating Cash Flow
$135,000.00
How to Use the Operating Cash Flow Calculator
Operating cash flow (OCF) adjusts net income for non-cash items and changes in working capital to show the actual cash a business generated from its core operations. Depreciation and amortization are added back because they reduce net income without using any cash. Working capital changes are subtracted because tying up more cash in things like receivables or inventory reduces the cash actually available, even though it doesn't appear as an expense on the income statement.
Example
A company reports $120,000 net income, $25,000 of depreciation and amortization, and a $10,000 increase in working capital during the period. OCF = 120,000 + 25,000 − 10,000 = $135,000 of cash generated from operations.
Common Use Cases
- Checking whether a company's reported profit is backed by real cash generation.
- Comparing operating cash flow to net income to spot aggressive accrual accounting.
- Building a quick cash flow statement estimate for internal financial review.
FAQs
- What sign should I use for the working capital change? Enter a positive number if working capital increased during the period (which reduces cash flow), and a negative number if it decreased (which increases cash flow). The field label reminds you of this convention — it's the most common source of error in this calculation.
- Why isn't operating cash flow the same as net income? Net income includes non-cash items like depreciation and is affected by accrual accounting timing (recording revenue or expenses before cash actually changes hands). OCF strips those effects out to show real cash movement from day-to-day operations.
- Does OCF include capital expenditures or financing activities? No — operating cash flow covers only core business operations. Capital expenditures fall under investing activities, and things like debt repayment or dividends fall under financing activities, both reported separately on a full cash flow statement.