How To Calculate Operating Cash Flow in Deltek Vision | Arithmix

Operating cash flow is a crucial metric for any business, as it helps to determine the amount of cash generated or used by a company's core operations. By calculating operating cash flow, you can gain insight into the financial health of your business and make informed decisions about future investments and expenditures. In this article, we'll explore what operating cash flow is, when it's valuable to calculate, and how to calculate it.

What Is Operating Cash Flow?

Operating cash flow is the amount of cash generated or used by a company's core operations, such as sales and production. It's calculated by subtracting operating expenses from operating revenues. This metric is important because it helps to determine whether a company is generating enough cash from its operations to cover its expenses and invest in future growth.

Operating cash flow is different from net income, which is the amount of profit a company generates after all expenses are deducted from revenue. Net income includes non-cash items such as depreciation and amortization, which do not affect a company's cash flow. Operating cash flow, on the other hand, focuses solely on cash generated or used by a company's operations.

When Is It Valuable To Calculate Operating Cash Flow?

Calculating operating cash flow is valuable in a variety of situations. For example, if you're considering investing in a new project or expanding your business, you'll want to know whether your current operations are generating enough cash to support these initiatives. Similarly, if you're experiencing cash flow problems, calculating operating cash flow can help you identify where the problem is and make necessary changes.

Operating cash flow is also useful for investors and lenders, who want to know whether a company is generating enough cash to cover its expenses and pay back any loans. By calculating operating cash flow, you can provide these stakeholders with a clear picture of your company's financial health.

How to Calculate Operating Cash Flow

Calculating operating cash flow is a straightforward process. Here's how to do it:

1. Start with your operating revenues, which include all the cash your business generates from its core operations, such as sales and production.
2. Subtract your operating expenses, which include all the cash your business spends on its core operations, such as salaries, rent, and utilities.
3. The resulting number is your operating cash flow.

Here's the formula:

Operating Cash Flow = Operating Revenues - Operating Expenses

It's important to note that this formula only takes into account cash transactions. If your business uses accrual accounting, you'll need to adjust your numbers to reflect cash transactions only.

Calculating operating cash flow is an important step in understanding your business's financial health. By following these steps, you can gain insight into whether your operations are generating enough cash to cover your expenses and invest in future growth.

How Do You Calculate Operating Cash Flow in Deltek Vision

Deltek Vision itself isn’t naturally geared towards letting you calculate complex metrics like Operating Cash Flow. As an alternative, teams typically use products like Arithmix to import data from Deltek Vision and build out dashboards.

What is Arithmix?

Arithmix is the next generation spreadsheet - a collaborative, web-based platform for working with numbers that’s powerful yet easy to use. With Arithmix you can import data from systems like Deltek Vision, combine it with data from other systems, and create calculations like Operating Cash Flow.

In Arithmix, data is organized into Tables and referenced by name, not by cell location like a spreadsheet, simplifying calculation creation. Data and calculations can be shared with others and re-used like building blocks, vastly streamlining analysis, model building, and reporting in a highly scalable and easy to maintain platform. Data can be edited, categorized (by dimensions) and freely pivoted. Calculations are automatically copied across a dimension - eliminating copy and paste of formulas.

Arithmix is fully collaborative, giving your entire team access to your numbers and the ability to work together seamlessly.

Calculating Operating Cash Flow in Arithmix

Calculating metrics like Operating Cash Flow is simple in Arithmix. Once you've created your free account, you’ll be able to import your Deltek Vision data, and use it to create natural language formulas for metrics like Operating Cash Flow.

Arithmix is designed to give you the power to build any calculations you want on top of your Deltek Vision data, while also being easy to use and collaborate on. You can share your dashboards with users inside and outside of your organisation, making it easy to empower your whole team.