Operating Cash Flow Calculator
The real money a company is getting from operations Cash Flow. The Operating Cash flow equal to added to net income , depreciation , amortization , change operating working capital , income tax payable , net of other cash flows.
Formula us,
Operating cash flow = Net income + Depreciation + Amortization + Change operating working capital + Income tax payable + Net of other cash flows
let us consider,
- Change in inventory: It includes the acquisition and consumption of inventory.
- Change in accounts receivables: This item refers to the money that clients have to pay to the company for the goods or services provided.
- Change in accounts payable: Contrary to the previous one, this item refers to the company’s debt with its providers/suppliers.
- Net operating cash flow increasing and higher than net income: A cash flow from operating activities in these conditions can only mean a successful company .
- Net operating cash flow decreasing and lower than net income can only mean bad times for the business. Basically, the company is earnings.
Example,
Operating cash flow = Net income + Depreciation + Amortization + Change operating working capital + Income tax payable + Net of other cash flows
Net income = 30,00$
Depreciation + Amortization = 6000$
Change inventory = 48,00$
Change accounts receivables = -6,000$
Change accounts payable = 7,000$
Income tax payable = -18,000 $
The answer is operating cash flow = 44,800$