Operating cash flow (CFO)

The cash a business generates from its core operations - selling its products or services, before any capex or financing activity. The first of three sections on the cash flow statement.

How it's built

Indian filings use the indirect method. Start with Profit Before Tax, then make adjustments:

Profit Before Tax (PBT)                       115
Add back: Depreciation (non-cash)              30
Add back: Interest expense (financing item)    15
Less:    Other income excluding interest      (8)
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Operating profit before working capital      152

Working capital changes:
  Increase in receivables           (25)        ← cash out
  Decrease in inventory             +12         ← cash in
  Increase in payables              +18         ← cash in
─────────────────────────────────────────────────
Operating profit after working capital      157

Less: Income tax paid                       (35)
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Net cash from operations (CFO)             122