Operating cash flow is the cash generated from the normal operations of a business. Capital budgeting is really important when making important business decisions. It helps in planning an organization's long-term investments. It is useful for measuring the cash margin that is generated by the organization's operations. OCF Tax shield approach is a technique used in estimating the capital budgeting of a firm. Use this OCF calculator to determine operating cash flow ratio.
Operating cash flow is the cash generated from the normal operations of a business. Capital budgeting is really important when making important business decisions. It helps in planning an organization's long-term investments. It is useful for measuring the cash margin that is generated by the organization's operations. OCF Tax shield approach is a technique used in estimating the capital budgeting of a firm. Use this OCF calculator to determine operating cash flow ratio.
Find the OCF ratio if the sales is $20000, cost is $250, tax rate is 15% and depreciation is $230.
Operating Cash Flow = ( 20000 - 250 ) × ( 1 - 15/100) + ( 230 × 15 /100)
= $16822