Calculating your operating cash flow is straightforward once you know the Operating Cash Flow formula and what each input means. This guide explains the method in plain language, walks through a manual calculation, and gives worked examples you can follow — then you can do it instantly with the Operating Cash Flow Calculator.
What is Operating Cash Flow?
The Operating Cash Flow calculation tells you your operating cash flow from a few simple inputs. The figure you are solving for here is the operating cash flow, expressed in INR.
The Operating Cash Flow formula
The core formula is:
Operating cash flow = Net income + Depreciation & amortisation - Increase in working capitalHere is what each input means:
- Net income — a money amount. Example: ₹1,00,000.
- Depreciation & amortisation — a money amount. Example: ₹20,000.
- Increase in working capital — a money amount. Example: ₹10,000.
How to calculate it step by step
- Write down the net income (for example, ₹1,00,000).
- Write down the depreciation & amortisation (for example, ₹20,000).
- Write down the increase in working capital (for example, ₹10,000).
- Apply the formula above to get your operating cash flow.
- Double-check the result with the Operating Cash Flow Calculator.
Worked examples
Example 1
| Input / Output | Value |
|---|---|
| Net income | ₹1,00,000 |
| Depreciation & amortisation | ₹20,000 |
| Increase in working capital | ₹10,000 |
| Operating cash flow | ₹1,10,000.00 |
With net income of ₹1,00,000, depreciation & amortisation of ₹20,000 and increase in working capital of ₹10,000, the operating cash flow works out to ₹1,10,000.00.
Example 2
With net income of ₹2,00,000, depreciation & amortisation of ₹20,000 and increase in working capital of ₹10,000, the operating cash flow works out to ₹2,10,000.00.
| Result | Value |
|---|---|
| Operating cash flow | ₹2,10,000.00 |
Example 3
With net income of ₹50,000, depreciation & amortisation of ₹20,000 and increase in working capital of ₹10,000, the operating cash flow works out to ₹60,000.00.
| Result | Value |
|---|---|
| Operating cash flow | ₹60,000.00 |
Tips for an accurate result
- Keep your units consistent — mixing, say, months with years or grams with kilograms is the most common source of error.
- Round only at the very end. Rounding inputs early can shift the final answer noticeably.
- Re-run the numbers whenever an input changes, rather than estimating from an old result.
- Annual rates must be converted to the period you are calculating for (for example, divide an annual rate by 12 for a monthly figure).
Prefer not to do the maths by hand? — the Operating Cash Flow Calculator does it instantly, for free, with the formula and a worked example built in.
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