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Finance GlossaryOperating Cash Flow (OCF)
Operating Cash Flow (OCF)
Definition of Operating Cash Flow (OCF)
Operating Cash Flow (OCF) measures the amount of cash generated by a company from its normal, day-to-day business activities. It is a key element in a company's cash flow statement. OCF indicates the company's ability to generate enough cash internally to sustain and expand its operations without access to external financing. A consistently positive and growing OCF is a sign of strong financial health and operational efficiency.
Related Terms
Sector Rotation
Sector rotation is an investment strategy where investors keep shifting their funds between sectors based on economic cycles or market trends. For example, defensive sectors tend to perform better during slowdowns. Cyclical sectors perform impressively during phases of growth. With strategic sector rotation, investors can manage risk while capitalizing on opportunities in different market conditions.
Internal Rate Of Return
Internal Rate Of Return (IRR) is used to measure the compound annual return generated by a financial asset. IRR is a tool in Discounted Cash Flow financial analysis that operates by bringing the Net Present Value (NPV) of cash flow to zero. That’s why IRR can be used to compare a variety of financial assets from the equity market or bond market to real estate.
Bureau Of Indian Standards
Bureau Of Indian Standards (BIS) is responsible for standardizing and certifying goods and services from third parties so that the end consumer knows that the products are safe and reliable.
BIS was established in 1986 and was rebranded from the Indian Standards Institution (ISI) to BIS during the year to adapt to the changing product landscape of India.
BIS was established in 1986 and was rebranded from the Indian Standards Institution (ISI) to BIS during the year to adapt to the changing product landscape of India.
Time Value of Money (TVM)
Time Value of Money (TVM) is the concept that money available today is worth more than the same amount in the future due to its earning potential. It forms the foundation of financial decision-making and valuation. TVM is applied in investments, loans, discounting cash flows, and retirement planning.
Margin Call
Margin call occurs when a brokerage firm requires the investor to deposit funds in their account or sell their securities in order to meet the minimum margin requirement in their account because the value of their leveraged investments has dropped below a required level. If market participants fail to do so, the broker forcibly closes the position to protect their loaned funds.
Bonds
Bonds are fixed income securities issued in exchange for a loan, generally by governments and corporations. A bond will generate a fixed interest rate on top of the principal across a fixed time period.
A bond market is a place where bonds are issued, bought, and sold. Bonds are issued in exchange for a loan generally by governments and corporations.
The quality of a bond can be understood by its credit rating, which is nothing but the creditworthiness of the company issuing it. The best bonds in India are known to have the following credit rating:
The quality of a bond can be understood by its credit rating, which is nothing but the creditworthiness of the company issuing it. The best bonds in India are known to have the following credit rating:
- SOV: Only for government bonds
- AAA: Highest
- AA+: High-medium
- A+: Upper-medium
- BBB+: Lower-medium
- BB+: Speculative
- B+: Highlight speculative
- CCC+: Risky
- CC: Extremely risky
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