Operating Cash Flow Formula

The operating cash flow (OCF) gives you the statement of cash inflows and outflows in a business organization over a period of time. The operating cash flow ratio is calculated by adding up the Net income, Noncash Expenses (Usually Depreciation Expense) and the Changes in the Working Capital. This operating cash flow formula helps to find if a company/organization is capable to achieve the needed cash flows. OCF Formula is derived from the EBIT, Depreciation and Taxes of an organization.

OCF Calculation Formula

Formula:

Operating Cash Flow (OCF) = EBIT + Depreciation - Taxes


Where,

EBIT = Earnings Before Interest and Taxes

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