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Operating Cash Flow Formula

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Operating Cash Flow is very important in any organization because it helps for measuring the cash margin generated by the normal business operations of the organization. Check FAQs

OCF = EBIT + D - T

OCF - Operating Cash Flow?EBIT - Earnings Before Interest and Taxes?D - Depreciation?T - Taxes?

Operating Cash Flow Example

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With units

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Here is how the Operating Cash Flow equation looks like with Values.

Here is how the Operating Cash Flow equation looks like with Units.

Here is how the Operating Cash Flow equation looks like.

20608 = 8746 + 11880 - 18

20608 = 8746 + 11880 - 18

20608 = 8746 + 11880 - 18

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Operating Cash Flow Solution

Follow our step by step solution on how to calculate Operating Cash Flow?

FIRST Step Consider the formula

OCF = EBIT + D - T

Next Step Substitute values of Variables

∴

OCF = 8746 + 11880 - 18

Next Step Prepare to Evaluate

∴

OCF = 8746 + 11880 - 18

LAST Step Evaluate

∴

OCF = 20608

Operating Cash Flow Formula Elements

Variables

Operating Cash Flow

Operating Cash Flow is very important in any organization because it helps for measuring the cash margin generated by the normal business operations of the organization.

Symbol: OCF

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Operating Cash Flow

Earnings Before Interest and Taxes

Earnings Before Interest and Taxes is a measure of a firm's profit that includes all expenses except interest and income tax expenses.

Symbol: EBIT

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Earnings Before Interest and Taxes

Depreciation

Depreciation is an accounting method of allocating cost of tangible asset over useful life. Monetary value of asset decreases over time due to obsolescence. This decrease is measured as depreciation.

Symbol: D

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Depreciation

Taxes

Taxes are generally an involuntary fee levied on individuals or corporations that are enforced by a government entity, whether local, regional, or national in order to finance government activities.

Symbol: T

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Taxes

Other formulas in Basics of Financial Accounting category

Go Discount Percentage

D% = (\frac{LP - SP}{SP}) \cdot 100

Go Depletion Charge per Unit

DC = \frac{OC - RV}{n Depletion}

Go Shareholders' Equity given Total Assets and Liabilities

TSE = TA - TL

Go Shareholders' Equity given Share Capital, Retained Earnings and Treasury Shares

TSE = SC + RE - TS

How to Evaluate Operating Cash Flow?

Operating Cash Flow evaluator uses Operating Cash Flow = Earnings Before Interest and Taxes+Depreciation-Taxes to evaluate the Operating Cash Flow, Operating cash flow is very important in any organization because it helps for measuring the cash margin generated by the normal business operations of the organization. Operating Cash Flow is denoted by OCF symbol.

How to evaluate Operating Cash Flow using this online evaluator? To use this online evaluator for Operating Cash Flow, enter Earnings Before Interest and Taxes (EBIT), Depreciation (D) & Taxes (T) and hit the calculate button.

FAQs on Operating Cash Flow

What is the formula to find Operating Cash Flow?

The formula of Operating Cash Flow is expressed as Operating Cash Flow = Earnings Before Interest and Taxes+Depreciation-Taxes. Here is an example- 20608 = 8746+11880-18.

How to calculate Operating Cash Flow?

With Earnings Before Interest and Taxes (EBIT), Depreciation (D) & Taxes (T) we can find Operating Cash Flow using the formula - Operating Cash Flow = Earnings Before Interest and Taxes+Depreciation-Taxes.

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Operating Cash Flow Formula

Operating Cash Flow Example

Operating Cash Flow Solution

Operating Cash Flow Formula Elements

Other formulas in Basics of Financial Accounting category

How to Evaluate Operating Cash Flow?

FAQs on Operating Cash Flow

Variable Name