Showing posts with label operating cash flow ratio. Show all posts
Showing posts with label operating cash flow ratio. Show all posts

Sunday 25 December 2011

'Operating Cash Flow Ratio' is sometimes a better indication of liquidity.



Definition of 'Operating Cash Flow Ratio'

A measure of how well current liabilities are covered by the cash flow generated from a company's operations.

Formula:
Operating Cash Flow Ratio
Investopedia Says

Investopedia 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.


Read more: http://www.investopedia.com/terms/o/ocfratio.asp#ixzz1hW4WvJ9t