Operating Cash Flow Ratio

Operating Cash Flow Ratio

A measure of how well current liabilities are covered by the cash flow generated from a company's operations.

Formula:

Notes:

The operating cash flow ratio can gauge a company's liquidity in the short term. Using cash flow as opposed to income is sometimes a better indication of liquidity simply because, as we know, cash is how bills are normally paid off.

See also: Cash Flow, Current Liabilities, Income, Liquidity