## Operating Cash Flow to Current Liabilities

## Online Calculators **for Business & Investment**

**Operating Cash Flow to Current Liabilities**

The **Operating Cash Flow to Current Liabilities** is an alternative to the current ratio. The current ratio is a measure of currents assets to current liabilities, but this alternative uses a direct measure of cash inflows from the ordinary course of business.

Ultimately current liabilities are paid with cash so this ratio allows us to tell if a business is generating enough cash from operations to meet these liabilities

Further, since not all current assets are convertible to cash, the **Operating Cash Flow to Current Liabilities** may be better test of liquidity and solvency than the current ratio

The ratio tells you how many times over the operating cash flow can meet the current liabilities.

*Operating Cash Flow to Current Liabilities Calculator*

**The calculator asks for:**

*Cash Flow from Operating Activitie*, you can find this in the Cash Flow Statement.

*Current Liabilities*, which is found in the Balance Sheet.

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