Operating Cash Flow
The cash generated by a company's core business activities during a period, after working capital movements and taxes paid.
Formula
Operating Cash Flow = Net Profit + Non-Cash Charges - Increase in Working Capital - Taxes Paid
Unit
₹ crore
In depth
Operating cash flow is the closest thing in the accounts to an unmanipulable number, because cash either arrived or it did not. Comparing it with net profit over several years is the standard earnings-quality test: a company whose cumulative operating cash flow badly lags cumulative profit is recognising income it is not collecting. It should not be compared with profit in a single year, since working capital swings and one-off tax payments distort short periods. Note that it sits before capital expenditure, so a positive operating cash flow does not by itself mean the business funds its own growth.
Worked example
Over five years a company reports ₹400 crore of cumulative net profit but only ₹150 crore of cumulative operating cash flow. ₹250 crore of reported earnings never turned into cash, and receivables and inventory are where it went.
Illustrative figures, chosen so the arithmetic is easy to follow. Not a live price and not a valuation of any company.
Educational reference only
This entry explains what “Operating Cash Flow” means. It is not investment advice and not a recommendation to buy or sell any security. Any numbers above are illustrative, not live prices, and nothing here predicts price direction or rates a stock. Consider your own circumstances and consult a SEBI-registered investment adviser before acting.