How To Calculate Operating Cash Flow in PeopleSoft | Arithmix

Operating cash flow is an important financial metric that helps businesses understand the cash generated or consumed by their operations. It is a measure of the cash inflows and outflows related to a company's core business activities, such as sales and expenses. In this article, we will discuss how to calculate operating cash flow and why it is valuable for businesses to do so.

What Is Operating Cash Flow?

Operating cash flow is the cash generated or consumed by a company's core business operations. It is calculated by subtracting the company's operating expenses from its operating revenues. Operating revenues include sales revenue and any other revenue generated from the company's core business activities. Operating expenses include the cost of goods sold, salaries and wages, rent, and other expenses related to the company's operations.

Operating cash flow is an important metric because it provides insight into a company's ability to generate cash from its core business activities. A positive operating cash flow indicates that the company is generating more cash than it is spending on its operations, which is a good sign for investors and lenders. On the other hand, a negative operating cash flow indicates that the company is spending more cash than it is generating from its operations, which could be a red flag for investors and lenders.

When Is It Valuable To Calculate Operating Cash Flow?

Calculating operating cash flow is valuable for businesses in a number of situations. For example, if a company is considering expanding its operations or investing in new projects, it is important to understand how much cash it is generating from its existing operations. This can help the company determine whether it has the cash flow to support these new initiatives without jeopardizing its financial stability.

Operating cash flow is also useful for investors and lenders who are evaluating a company's financial health. By looking at a company's operating cash flow, investors and lenders can get a sense of how much cash the company is generating from its core business activities and whether it is able to cover its expenses and debt obligations. This information can help investors and lenders make informed decisions about whether to invest in or lend to the company.

In conclusion, calculating operating cash flow is an important financial metric that can provide valuable insights into a company's financial health. By understanding how to calculate operating cash flow and when it is valuable to do so, businesses can make informed decisions about their operations and investors and lenders can make informed decisions about their investments and loans.

How Do You Calculate Operating Cash Flow in PeopleSoft

PeopleSoft 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 PeopleSoft 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 PeopleSoft, 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 PeopleSoft 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 PeopleSoft 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.