Operating cash flow is defined as:

Question

Quizplus · Accepted Answer

Operating cash flow is the amount of cash generated by a company's operations after deducting operating expenses, such as salaries, rent, and taxes. Option C (EBIT + Depreciation - Taxes) represents the correct calculation of operating cash flow because it adds back non-cash expenses (depreciation) to earnings before interest and taxes (EBIT) and then subtracts taxes to arrive at the net amount of cash generated from operations. Options A, B, D, and E are all incorrect because they either do not include depreciation or subtract dividends or cash flow to investors, which are not part of operating cash flow.

Operating Cash Flow Is Defined As