Let's say the indicator for quality can be expressed as a ratio of
operating cash flow to net income so that the higher the ratio, the better the earnings.
To determine which of the two earnings metrics provides the relatively better estimate of
operating cash flow in an out-of-sample setting, a t-test is run to compare the mean forecast errors.
Since it's a noncash expense,
operating cash flow will be increased relative to income.
Free Cash Flow is significant for capital intensive firms, and Free Cash Flow and
Operating Cash Flow are both significant for non-capital intensive firms at the 1% level.
"We want to clarify that the agreement we announced today to provide operating income, synergies and
operating cash flow benefit is accretive to our prior plans."
Survey shows that decline in CFO positive sentiment is further reflected in expectations for
operating cash flow to be generated in the coming 12 months, where only 47 percent of CFOs surveyed in the Middle East expect
operating cash flows to increase, down from 82 percent in the previous year
*
Operating cash flow to total assets =
operating cash flow % total assets, and
Operating cash flow jumped to EUR143.4m from EUR53m.
Recurring
operating cash flow (REBITDA) followed the same pattern, coming in at 12 million euros compared to 17.2 million a year earlier.