![]() ![]() To calculate operating cash flow, add your net income and non-cash expenses, then subtract the change in working capital. Operating cash flow (OCF) gives a picture of the company’s ability to generate cash from its normal operations. Routinely calculating your cash flows using this formula or one of the others listed below can ensure you don't encounter any cash flow problems and maintain an accurate picture of your business’s financial health. Net Cash Flow = Operating Cash Flow + Cash Flow from Financial Activities (Net) + Cash Flow from Investing Activities (Net) Why is it important to calculate cash flow? It’s also possible to calculate net cash flow by adding the total value of three variables that already account for cash inflows and outflows: The American Express® Business Gold Card helps you to maintain this balance by offering a payment period of up to 54 days¹, which allows you more time to gather payments before your own are due. Net Cash Flow = Total Cash Inflows – Total Cash Outflowsīalancing cash inflow and outflow is vital to maintaining a healthy business. To calculate net cash flow, simply subtract the total cash outflow by the total cash inflow. It’s a key indicator of a company’s financial health. Net cash flow is the difference between all the company’s cash inflows and cash outflows in a given period. Here’s a run-down of the key formulae that small business owners need. So, how can you keep track of the cash flowing in and out of your business? What tools can you use to help ensure your business has enough cash, not just to survive, but to grow and expand? And what metrics will lenders and investors want to see? Every small business owner knows that cash is king, but many face problems at some point – 60% of small businesses have reported struggling with cash flow, and 72% of those say it has disrupted their operations. ![]()
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