Cash Flow Calculator
Calculate your business cash flow including operating cash flow, free cash flow, and cash flow from investing and financing activities. This comprehensive calculator helps you understand your business's cash position and liquidity.
Operating Activities
Investing Activities
Financing Activities
Cash Flow Summary
Operating Cash Flow:
$0.00
Investing Cash Flow:
$0.00
Financing Cash Flow:
$0.00
Net Cash Flow:
$0.00
Free Cash Flow
Free Cash Flow:
$0.00
FCF Margin:
0.00%
Cash Flow Health:
N/A
Cash Flow Ratios
Cash Flow Coverage:
0.00x
Operating Cash Ratio:
0.00x
Liquidity Status:
N/A
Understanding Cash Flow
Cash flow represents the movement of money in and out of a business. It's different from profit because it accounts for when revenue is collected and expenses are paid, rather than when they're earned or incurred. Understanding cash flow is crucial for business survival and growth.
Types of Cash Flow
Operating Cash Flow
- Cash from core business operations
- Most important cash flow category
- Indicates business sustainability
- Used for ongoing expenses
Investing Cash Flow
- Cash from buying/selling assets
- Capital expenditures
- Asset sales proceeds
- Growth and maintenance investments
Financing Cash Flow
- Cash from debt and equity
- Loans and repayments
- Stock issuances
- Dividend payments
Free Cash Flow
- Cash available for distribution
- Operating cash minus capex
- Used for dividends and buybacks
- Key valuation metric
Cash Flow vs Profit
Key Differences
Understanding the distinction
Profit (Net Income):
- Accounting measure
- When revenue earned
- When expenses incurred
- Accrual basis
Cash Flow:
- Actual cash movement
- When cash received
- When cash paid out
- Cash basis
Operating Cash Flow Formula
OCF Calculation
Direct and indirect methods
Indirect Method:
- Start with net income
- Add back non-cash expenses
- Adjust for working capital changes
- Most common method
Direct Method:
- Cash receipts minus cash payments
- More detailed but complex
- Shows actual cash movements
- Less commonly used
Free Cash Flow
Formula:
- FCF = Operating Cash Flow - Capex
- Also: FCF = CFO - Net Capex
- Cash available to investors
- Used for valuation
Uses:
- Dividend payments
- Stock buybacks
- Debt reduction
- Business expansion
Cash Flow Ratios
Operating Cash Flow Ratio:
- OCF ÷ Current Liabilities
- Measures short-term liquidity
- Ability to pay current obligations
- Target: >1.0
Cash Flow Coverage:
- OCF ÷ Total Debt
- Debt service capability
- Financial health indicator
- Higher ratio is better
Improving Cash Flow
Speed Up Receivables:
- Offer early payment discounts
- Improve collection processes
- Use invoice factoring
- Implement credit policies
Slow Down Payables:
- Negotiate payment terms
- Take advantage of discounts
- Optimize payment schedules
- Build supplier relationships
Manage Inventory:
- Reduce excess inventory
- Implement just-in-time
- Improve forecasting
- Optimize supply chain
Control Expenses:
- Regular expense reviews
- Eliminate unnecessary costs
- Negotiate better terms
- Implement cost controls
Cash Flow Forecasting
Short-term (1-3 months):
- Daily/weekly cash positions
- Payroll and bill payments
- Seasonal cash needs
- Working capital requirements
Long-term (1+ years):
- Capital expenditure planning
- Debt repayment schedules
- Growth investment needs
- Dividend policy planning
Common Cash Flow Problems
Cash Flow Gaps:
- Seasonal business cycles
- Growth spurts
- Late customer payments
- Unexpected expenses
Solutions:
- Line of credit
- Invoice factoring
- Expense deferral
- Cash flow forecasting
Key Takeaways for Cash Flow Management
- Cash flow is more important than profit for business survival
- Operating cash flow is generated from core business activities
- Free cash flow represents cash available for distribution to investors
- Positive cash flow doesn't guarantee profitability, and profitable businesses can have negative cash flow
- Cash flow management requires balancing receivables, payables, and inventory
- Regular cash flow forecasting helps prevent cash shortages
- Improving cash conversion cycle can significantly enhance cash flow
- Monitor cash flow ratios to assess financial health and liquidity