Cash Flow from Operation (CFO)

Brief Definition

Cash flow from operating activities is a section of a company’s cash flow statement that shows the cash generated or used by the core business operations during a specific period.

Further Explanation

Cash flow from operating activities is a section of a company’s cash flow statement that shows the cash generated or used by the core business operations during a specific period. This section provides insight into a company’s ability to generate sufficient cash from its regular business activities to maintain and grow its operations without relying on external financing.

Example:
Salaries paid out to employees
Cash paid to vendors and suppliers
Cash collected from customers
Interest income and dividends received
Income tax paid and interest paid