Operating Cash Flow

Definition

Cash generated by normal business operations, excluding financing and investing activities. The money actually coming from selling stuff, not selling assets.

Example Usage

Our operating cash flow was positive even though net income was negative, which means our business works but our accounting doesn't.

Origin

Cash flow statement terminology standardized in 1988

Fun Fact

Operating cash flow is harder to manipulate than net income, making it the 'real' profit number if you want to know the truth.

Source: Cash flow analysis

Related Terms

Beginner

interest

The cost of borrowing money, expressed as a percentage of the principal amount. It's how banks turn your desire for immediate gratification into their profit center. Higher interest rates mean you pay more; lower rates mean you're either blessed or about to get the financial rug pulled out from under you.

💰 Finance / Accounting

Intermediate

accountancy

The professional practice of accounting, elevated to sound more prestigious—because 'accountant' apparently needed fancier branding. It encompasses the entire field of financial reporting, auditing, tax preparation, and making sure companies follow arcane rules that change annually. The British prefer this term, Americans less so, but everyone agrees it involves lots of coffee and spreadsheets.

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retirement

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Beginner

Payback Period

The time required to recover an initial investment through cash inflows. How long before your terrible investment decision stops being actively terrible.

💰 Finance / Accounting

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working capital

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💰 Finance / Accounting

Advanced

Short Selling

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💰 Finance / Accounting

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