Operating cash flow (CFO) is the part of the cash flow statement that shows whether the business generates money from its ordinary activity. It includes receipts from customers, payments to suppliers, wages, taxes and other recurring operations. It is the most reliable indicator of the short-term health of the business, as it reflects the real liquidity coming from operations, not from investing or financing. A consistently positive CFO shows that the company can sustain its operating expenses and undertake investments without relying on loans or capital increases. By contrast, a recurring negative CFO indicates that the business consumes more cash than it produces, a sign of an unsustainable model or poor working capital management.

• Receipts from customers
• Payments to suppliers and staff
• Operating taxes

• CFO > 0 and stable → self-sufficient business, generates real liquidity.
• Volatile CFO → dependence on the collection/payment cycle or on external factors.
• CFO < 0 over several years → weak operating model or poorly financed growth.

• Simple cash flow
• CFI (investing)
• CFF (financing)
• Earnings quality