Operating Cash Flow Calculator

How it is calculated

The tool uses the indirect method: OCF = net income + depreciation − change in working capital. Net income is the profit after tax from the income statement. Depreciation (and amortisation) is added back because it reduced profit without any cash leaving the business, so it cannot be negative. The working-capital change is the increase in working capital over the period: enter an increase as a positive number (cash tied up in receivables or inventory, which lowers OCF) and a decrease as a negative number (which raises OCF). All three amounts are for the same period and currency, and every field must be filled in; enter 0 for an item that does not apply. Negative net income is allowed, and a negative OCF prints with the sign before the dollar sign, such as -$2,000.00. The tool also shows the net adjustment, depreciation − change in working capital. Other non-cash items, such as stock-based pay, are not separate fields.

Common mistakes

• Getting the sign of the working-capital change wrong. A rise in receivables or inventory must be entered as a positive number, since the tool subtracts it. Typing it as negative adds it instead.
• Entering depreciation as a negative number because it is an expense on the income statement. The tool adds it back and needs a positive figure; a negative one shows no result.
• Adding depreciation twice by starting from operating profit before depreciation instead of net income. Start from net income if depreciation is a separate field.
• Leaving the working-capital box empty because there was no change. The field must contain 0, otherwise no result appears.
• Forgetting other non-cash items such as stock-based pay or gains on asset sales. They are not in this tool, so the result can differ from the cash-flow statement.