What is Operating Cash Flow Ratio?
A measure of how well current liabilities are covered by the cash flow generated from a company’s operations.
Formula: Read more for examples and further explanation including related video clips and also comments
Example explains Operating Cash Flow Ratio
The operating cash flow ratio can gauge a company’s liquidity in the short term. Using cash flow as opposed to income is sometimes a better indication of liquidity simply because, as we know, cash is how bills are normally paid off.
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