Operating cash flow ratio definition


Operating cash flow ratio definition (cash flow from operations ratio) shows how much the company earns from its’ core activities per one dollar of current liabilities (short term debts). Data to calculate this ratio is collected from balance sheet and cash flow statement.

This ratio shows how well a company can fulfill its’ short term obligations. Cash flow from operations ratio is important for the company’s creditors.

Norms and limitations

The higher value of the ratio indicates a better ability of a company to fulfill its’ current liabilities.

It is recommended to compare this ratio to those of the companies, working within the same industry.


Operating cash flow (OCF, cash flow from operations) is the money that a company earns from its core business.

Current liabilities, also known as short-term debts, indicate debts that must be covered in a period of 12 months.