Cash flow from operations

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Cash flow from operations

A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses that are deducted in calculating net income.

Cash Flow From Operations

A ratio of a company's cash flow to either its net income or operating income. The latter ratio provides a more accurate description of a company's cash flow, while the former takes into account the effects of non-operation transactions on income. Cash flow from operations shows the difference, if any, between a company's reported income and actual cash on hand.
References in periodicals archive ?
A much more complex and potentially confusing reconciliation of net income and cash flows from operations results when net income is adjusted for the bad debts provision and the change in accounts receivable (see Alternative C column of Table 2) [TABULAR DATA FOR TABLE 2 OMITTED].
But to correctly derive the $42,000 cash flows from operations, net income is adjusted for a $35,000 increase in accounts receivable.
95, the change in operating receivables must be included as an adjusting item in the reconciliation of net income and cash flows from operations.
The quality of the cash flows can be derived from the percentage of cash flows from operations provided from net income.
A higher quality of cash flows is normally indicated by a lower percentage of cash flows from operations attributable to the adjustment for non-cash expenses.
43%; hence, this adjustment accounts for almost 60|cents~ of each dollar of cash flows from operations.
The ratio of interest paid to cash flows from operations signifies the firm's ability to meet current obligations for interest.
A better measure of the firm's interest-paying ability is to use interest paid and cash flows from operations to compute an interest payout ratio.
To compute this ratio, interest paid and income taxes paid are added to cash flows from operations.
The simple approach for evaluating the quality of income is a ratio comparing cash flows from operations to operating income.
Therefore, dividends paid are deducted from cash flows from operations.
These funds therefore should be included with cash flows from operations.