Cash and debt

Cash from Operations

The cash that came in from the company's everyday business during the year, after paying suppliers, employees and other running costs.

Why does it matter?

It shows whether the business brings in real cash. This can differ from profit because of timing and costs that don't involve cash in that year.

How do I read it?

Compare it with net income over several years. Free cash flow starts from this number and subtracts capital expenditures.

Example

A software company collects a year of subscriptions in advance. It counts the revenue month by month, but the cash arrives at the start, so its operating cash flow can be higher than its profit.