What Is an Operating Cash Flow Ratio?

Operating Cash Flow Ratio refers to the value obtained by comparing cash flow with other project data. Cash flow ratio = Net cash flow from operating activities / current liabilities at the end of the period.

Operating cash flow ratio

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Operating Cash Flow Ratio refers to the value obtained by comparing cash flow with other project data. Cash flow ratio = Net cash flow from operating activities / current liabilities at the end of the period.

Operating Cash Flow Ratio

[What is operating cash flow ratio]

[Calculation formula for operating cash flow ratio]

Operating cash flow ratio =

[The significance of operating cash flow ratio]

Through this ratio analysis, we can understand the source of most of the cash needed to maintain the company's operation and support its development, so as to judge whether the company's financial status is good and the company's operation is healthy. Generally speaking, the company's cash inflow is mainly based on operating activities, supplemented by cash recovered from investment and dividends, and cash obtained from bank borrowings, bond issuance, and external investment. Early warning signal: similar to the main business income profit margin indicator, when the operating cash flow ratio is less than 50%, an early warning signal is generated.