Operating Cash Flow Calculator

Formula

The formula to calculate the operating cash flow is:

\[ OCF = OI + D - T + CWC \]

Where:

$ OCF $ is the Operating Cash Flow ($)
$ OI $ is the Operating Income ($)
$ D $ is the Depreciation ($)
$ T $ is the Taxes ($)
$ CWC $ is the Change in Working Capital ($)

What is Operating Cash Flow?

Operating cash flow (OCF) is a term used in business and finance to describe the amount of cash that is generated by a business’s typical operating activities. This means the cash flow does not include any cash flows from investments unless the core of the business is actually investing.

Example Calculation

Let's assume the following values:

Operating Income (OI): $100,000
Depreciation (D): $10,000
Taxes (T): $20,000
Change in Working Capital (CWC): $5,000

Using the formula to calculate the operating cash flow:

\[ OCF = 100,000 + 10,000 - 20,000 + 5,000 = 95,000 \text{ $} \]

The operating cash flow is $95,000.