Operating Cash Flow to Current Liabilities Ratio Calculator

Formula

The formula to calculate the Operating Cash Flow to Current Liabilities Ratio is:

\[ \text{OCF}_{ratio} = \frac{\text{OCF}_{TTM}}{\text{CL}} \]

Where:

$\text{OCF}_{TTM}$ = OCF$_{Q4}$ + OCF$_{Q3}$ + OCF$_{Q2}$ + OCF$_{Q1}$
$\text{CL}$ = Current Liabilities

Description

The Operating Cash Flow to Current Liabilities Ratio measures a company's ability to cover its short-term obligations with the cash flow generated from its operations over the past twelve months.

Example Calculation

Let's assume the following:

Operating Cash Flow Q4: $41.6 million
Operating Cash Flow Q3: $0.5 million
Operating Cash Flow Q2: $49.3 million
Operating Cash Flow Q1: $128.7 million
Current Liabilities: $178 million

To calculate the OCF TTM:

\[ \text{OCF}_{TTM} = 41.6 + 0.5 + 49.3 + 128.7 = 220.1 \, \text{million} \]

Then, the ratio is calculated as follows:

\[ \text{OCF}_{ratio} = \frac{220.1}{178} \approx 1.236 \]

Therefore, the Operating Cash Flow to Current Liabilities Ratio is approximately 1.236.