Glossary

Operating cash flow

Operating cash flow is the cash a business generates from its core trading activities — customer receipts less payments to suppliers, staff and overheads — before any financing or investing activity.

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From tradingBefore finance

Definition

Operating cash flow is the cash a business generates from its core trading activities — customer receipts less payments to suppliers, staff and overheads — before any financing or investing activity. It sits at the top of the cash flow statement.

In plain terms

Unlike profit, it counts money only when it actually moves, so it strips out the accounting timing that flatters or distorts the profit line. It answers the most basic question about a business: does the core activity actually produce cash?

Why it matters

Lenders watch operating cash flow closely because it is what services debt and is hard to flatter. See operating cash flow explained and how to improve it.