Operating Cash Flow Ratio Calculator
Assess how well operating cash flow covers current liabilities for liquidity analysis
Calculate Operating Cash Flow Ratio
Total debts due within one year (accounts payable, short-term debt, etc.)
Most recent quarter cash flow
3 months before Q4
6 months before Q4
9 months before Q4
Operating Cash Flow Ratio Results
Formula: OCF Ratio = Operating Cash Flow TTM ÷ Current Liabilities
TTM Calculation: $0 + $0 + $0 + $0 = $0
Benchmark: Ratio ≥ 1.0 indicates strong liquidity coverage
Ratio Analysis Guidelines
Ratio ≥ 1.0: Excellent - Operating cash flow fully covers current liabilities
Ratio 0.5-1.0: Acceptable - Moderate coverage, monitor composition of liabilities
Ratio < 0.5: Risky - Low coverage, requires additional analysis
Negative OCF: Poor - Immediate attention needed for operational issues
Example: Skyworks vs Cirrus Logic
Skyworks (NASDAQ: SKWS)
Operating Cash Flow: $1,204 million
Current Liabilities: $448.4 million
OCF Ratio: 1,204 ÷ 448.4 = 2.69
Assessment: Excellent liquidity coverage with substantial cash generation
Cirrus Logic (NASDAQ: CRUS)
OCF Q4: $41.6M, Q3: $0.5M, Q2: $49.3M, Q1: $128.7M
Operating Cash Flow TTM: $220.1 million
Current Liabilities: $178 million
OCF Ratio: 220.1 ÷ 178 = 1.23
Assessment: Good coverage, but lower than Skyworks
Current Liabilities Components
Short-term debt
Bank loans due within one year
Accounts payable
Money owed to suppliers
Accrued expenses
Employee wages, taxes, utilities
Current portion of long-term debt
Principal payments due this year
Analysis Tips
Compare ratios across multiple quarters for trends
Consider industry benchmarks and business models
Analyze composition of current liabilities
Use alongside current ratio and quick ratio
Monitor cash conversion cycle trends
Understanding Operating Cash Flow Ratio
What is Operating Cash Flow Ratio?
The operating cash flow ratio measures how well a company's operating cash flow can cover its current liabilities. It provides insight into the company's ability to pay short-term debts using cash generated from core business operations.
Why Use TTM Data?
- •Smooths out seasonal variations in cash flow
- •Provides more accurate liquidity assessment
- •Matches current liabilities snapshot with annual cash flow
- •More reliable than single quarter comparisons
Formula Components
OCF Ratio = OCF TTM ÷ Current Liabilities
OCF TTM = Q4 + Q3 + Q2 + Q1
- OCF TTM: Trailing twelve months operating cash flow
- Current Liabilities: Debts due within one year
- Q4: Most recent quarter cash flow
- Q3-Q1: Previous three quarters
Important: Use actual quarterly operating cash flow values from cash flow statements, not cumulative year-to-date figures.
Interpreting the Results
Strong Ratios (≥ 1.0)
- • Operating cash flow fully covers current liabilities
- • Strong liquidity position
- • Room for growth investments
- • Lower financial risk
Moderate Ratios (0.5-1.0)
- • Acceptable if liabilities are mostly non-interest bearing
- • Monitor composition of current liabilities
- • Check current assets availability
- • Industry context important