Operating cash flow
AccountingCash generated by the core business, after working-capital movements.
In plain terms
Compare five years of this against five years of net profit. Divergence is the red flag.
1492 terms
Glossary
Every term is defined twice: once the way a filing would put it, and once the way somebody would explain it to you across a table. The second one is usually the one that sticks.
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Accrual ratio
AccountingNet profit minus operating cash flow, divided by average total assets.
In plain terms
Sustained above about 10% deserves an explanation. The multi-year trend matters far more than any single year.
Free cash flow
AccountingOperating cash flow minus capital expenditure.
In plain terms
The money genuinely available to owners after keeping the lights on.
Working capital change
AccountingThe movement in receivables, inventory and payables, adjusted against profit on the way to operating cash flow.
In plain terms
Where profit recorded but not collected disappears. Profit of ₹300 crore plus ₹120 crore of depreciation, less a ₹410 crore rise in receivables, leaves about ₹10 crore of operating cash.
Earnings quality
AccountingHow reliably reported profit converts into cash and persists into future periods.
In plain terms
Cumulative operating cash flow divided by cumulative profit over five years is the quick version. Above 0.8 is healthy.
Financing cash flow
AccountingAlso called: Cash flow from financing
The cash flow bucket covering borrowing and repayment, share issues and buybacks, and dividends paid.
In plain terms
Read it alongside the other two. Negative operating cash flow with a large positive here describes a company kept alive by fresh borrowing rather than by trading.
Turnaround
Fundamental analysisA broken business bought on the expectation that it will be repaired.
In plain terms
A success might triple; a failure approaches zero slowly while absorbing more capital each time you average down. Credible ones show operating cash flow improving before profit does.