How To Calculate Operating Cash Flow Margin in Workday | Arithmix

Calculating the operating cash flow margin is an important financial metric that helps businesses understand how much cash they generate from their operations. It is a measure of the company's ability to generate cash from its core business activities, and it is a key indicator of the company's financial health. In this article, we will discuss how to calculate the operating cash flow margin and why it is valuable for businesses to do so.

What Is Operating Cash Flow Margin?

The operating cash flow margin is a financial metric that measures the percentage of cash generated by a company's operating activities relative to its total revenue. It is calculated by dividing the operating cash flow by the total revenue and multiplying the result by 100. The operating cash flow is the cash generated by a company's core business activities, such as sales and services, and excludes cash flows from investments and financing activities.

The operating cash flow margin is an important metric because it provides insight into a company's ability to generate cash from its operations. A high operating cash flow margin indicates that a company is generating a significant amount of cash from its core business activities, which is a positive sign for investors and lenders. On the other hand, a low operating cash flow margin may indicate that a company is struggling to generate cash from its operations, which could be a red flag for investors and lenders.

When Is It Valuable To Calculate Operating Cash Flow Margin?

Calculating the operating cash flow margin is valuable for businesses in a variety of situations. For example, it can be useful for businesses that are looking to improve their financial performance. By calculating the operating cash flow margin, businesses can identify areas where they can improve their cash flow generation and take steps to address those areas.

The operating cash flow margin is also valuable for businesses that are looking to attract investors or lenders. Investors and lenders often look at a company's operating cash flow margin as an indicator of its financial health and ability to generate cash. A high operating cash flow margin can make a company more attractive to investors and lenders, while a low operating cash flow margin can make it more difficult to secure financing.

Finally, calculating the operating cash flow margin is valuable for businesses that are looking to compare their financial performance to that of their competitors. By comparing their operating cash flow margin to that of their competitors, businesses can identify areas where they may be falling behind and take steps to improve their financial performance.

In conclusion, calculating the operating cash flow margin is an important financial metric that can provide valuable insights into a company's financial health and ability to generate cash from its operations. By understanding how to calculate the operating cash flow margin and when it is valuable to do so, businesses can take steps to improve their financial performance and attract investors and lenders.

How Do You Calculate Operating Cash Flow Margin in Workday

Workday itself isn’t naturally geared towards letting you calculate complex metrics like Operating Cash Flow Margin. As an alternative, teams typically use products like Arithmix to import data from Workday 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 Workday, combine it with data from other systems, and create calculations like Operating Cash Flow Margin.

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 Margin in Arithmix

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

Arithmix is designed to give you the power to build any calculations you want on top of your Workday 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.