WHAT IS THE OPERATING CASH FLOW RATIO? (EASIEST EXPLANATION) Straight to the Point скачать в хорошем качестве

WHAT IS THE OPERATING CASH FLOW RATIO? (EASIEST EXPLANATION) Straight to the Point

In around two minutes you will know what is the Operating Cash Flow Ratio. You will get both professional definition and easy explanation. No intro, no outro, straight to the point. ► My 215 Companies Watchlist: https://bit.ly/3cbWL3f ► The Best Books about Investing: https://www.amazon.ca/shop/artemdikarev ► Get $10 for Opening an Account with Wealthsimple: https://bit.ly/3kzztaD ► Get $25 from Newton (Canada): https://web.newton.co/r/BP8LC6 ► Get $10 in Bitcoin from BlockFi: https://blockfi.com/?ref=ebccda0d ► Get $10 from Coinbase: https://www.coinbase.com/join/dikare_1 ► Download my FREE eBook about Investments: https://bit.ly/2FL2UHI ► Follow Me On Instagram:   / artemdkrv   Operating Cash Flow Ratio is the liquidity ratio that shows the ability of a company to cover its most urgent debt obligations with the money generated from the firm's main business activities. Another liquidity ratios are current ratio, quick ratio, and cash ratio. And if you are not sure what any of them mean, feel free to watch my other videos. The formula for operating cash flow ratio is very simple. You just need to take operating cash flow and divide it by current liabilities. You can find operating cash flow on the cash flow statement, and current liabilities on the balance sheet. Long story short, operating cash flow is money that business generates through its main activities. For example, if the company sells furniture, every dollar received from such sales goes under operating cash flow. And operating cash flow ratio shows us whether the money that a company receives from its business operations is sufficient to cover its most urgent debt obligations. If this ratio is more than 1, it means that company makes enough money. And if it is below 1, especially if it stays there for an extended period of time, then a company might face financial problems in the future. Since it will not be generating enough money to cover its obligations, it might need to raise additional capital or even sell some of its assets. Which is obviously not good in long term perspective. Operating cash flow ratio is just one of the ratios that investors use when analyzing companies. That is why you should never rely solely on this ratio when making your investment decision. Take into consideration other factors and fundamentals before making your final choice. Additionally, operating cash flow ratios might vary from industry to industry. Therefore, always compare companies within the same industry. If you find my content interesting, please consider subscribing to my channel. It helps a lot as a beginner creator. And let me know if there is anything you would like to know about personal finances and investing. *None of this is meant to be construed as investment advice, it's for entertainment purposes only. Links above include affiliate commission or referrals. I'm part of an affiliate network and I receive compensation from partnering websites. The video is accurate as of the posting date but may not be accurate in the future.