Cash Flow From Operations

Cash flow from operations is the amount of cash a company generates after adjusting for operating activities.

To calculate operating cash flow, combine the company’s net income, non-cash items (like depreciation), and changes in working capital (like accounts receivable and payable). Net income isn’t the best indicator of cash flow, as it doesn’t incorporate income to be received (accounts receivable) and expenses to be paid (accounts payable). Operating cash flow is an important indicator of business performance.