Operating cash flow is net receipts and payments from ordinary business activities during a period. For a merchant, these include customer collections and payments for inventory, staff and other operating needs. Investing and financing are separate cash-flow categories.[1]
Borrowing can increase bank cash without improving the cash generated by trading. Conversely, inventory build-up can consume cash while profit remains positive. Use this measure to understand operational funding needs and state the period and classification. It is not sales revenue or a profit-margin percentage.
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Compiled with AI assistance using public sources. General explanation, not individual legal or tax advice. Describing a concept does not mean Zoloo offers it as a feature.