Cash Flow Calculator

Calculate operating cash flow and free cash flow. Essential for understanding business liquidity and financial health.

Operating Cash Flow
$operatingCashFlow
Cash from core operations
Free Cash Flow
$freeCashFlow
Cash available after investments
Cash Flow Margin
cashFlowMargin%
Operating cash flow as % of net income
💡 Cash Flow Insights
• Positive operating cash flow = healthy core business
• Free cash flow = money available for growth and dividends
• Operating CF = Net income + Non-cash expenses + Working capital changes
• Free CF = Operating CF - Capital expenditures
• Cash flow matters more than profit for survival

Cash Flow Calculation

Cash flow measures actual cash movement in and out of your business.

Operating Cash Flow Formula

OCF = Net Income + Depreciation + Change in Working Capital

Free Cash Flow Formula

FCF = Operating Cash Flow - Capital Expenditures

Components Explained

Depreciation: Add back because it's a non-cash expense that reduced net income.

Working Capital: Changes in accounts receivable, inventory, and payables. Negative change = cash improvement.

CapEx: Cash spent on equipment, property, technology investments.

Frequently Asked Questions

What is the difference between cash flow and profit?

Profit is accounting income (revenue minus expenses). Cash flow is actual cash in and out. Example: $100k invoice (profit) but customer pays in 90 days (no cash flow yet). You can be profitable but cash-poor. Cash flow includes timing of receipts, payments, and non-cash items like depreciation.

What is operating cash flow?

Operating cash flow (OCF) is cash generated from core business operations. Formula: Net income + Depreciation/Amortization + Changes in working capital. OCF excludes financing and investing. Positive OCF means the business generates cash from operations. Target: OCF should exceed net income.

What is free cash flow?

Free cash flow (FCF) is cash available after maintaining/expanding operations. Formula: Operating cash flow - Capital expenditures. FCF shows money available for growth, dividends, debt repayment. Positive FCF = self-sustaining business. Negative FCF may require fundraising. FCF is key valuation metric.

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