Calculate cash flow from assets or solve for operating cash flow, capital expenditure, or working capital when three values are known.
Cash Flow From Assets Formula
The cash flow from assets formula measures how much cash a business generates from its assets after paying for capital expenditures and working capital needs.
CFFA = OCF - CAPEX - WC
- CFFA = Cash flow from assets
- OCF = Operating cash flow
- CAPEX = Capital expenditure spending
- WC = Working capital
The calculator can solve for any one missing value as long as you enter the other three values.
OCF = CFFA + CAPEX + WC
CAPEX = OCF - CFFA - WC
WC = OCF - CAPEX - CFFA
- To calculate cash flow from assets: subtract capital expenditure and working capital from operating cash flow.
- To calculate operating cash flow: add cash flow from assets, capital expenditure, and working capital.
- To calculate capital expenditure: subtract cash flow from assets and working capital from operating cash flow.
- To calculate working capital: subtract capital expenditure and cash flow from assets from operating cash flow.
How to Read Cash Flow From Assets Results
Cash flow from assets can be positive, zero, or negative. The meaning depends on why cash is being used or generated.
| Result | Basic interpretation | Possible meaning |
|---|---|---|
| Positive CFFA | Assets generated more cash than was reinvested. | The business may have cash available for debt payments, dividends, or reinvestment. |
| Zero CFFA | Operating cash flow exactly covered asset and working capital needs. | The business broke even on this cash flow measure. |
| Negative CFFA | Asset spending and working capital needs exceeded operating cash flow. | This may happen during expansion, but it can also signal cash pressure. |
| Input | What to enter | Effect on CFFA |
|---|---|---|
| Operating cash flow | Cash generated from normal business operations. | Higher OCF increases cash flow from assets. |
| Capital expenditure | Cash spent on long-term assets such as equipment, buildings, or major upgrades. | Higher CAPEX lowers cash flow from assets. |
| Working capital | Cash tied up in short-term operating needs. | Higher working capital lowers cash flow from assets. |
Example Cash Flow From Assets Calculations
Example 1: Calculate cash flow from assets
Suppose a company has operating cash flow of $150,000, capital expenditure of $40,000, and working capital of $25,000.
CFFA = 150000 - 40000 - 25000
CFFA = 85000
The cash flow from assets is $85,000.
Example 2: Calculate operating cash flow
Suppose cash flow from assets is $60,000, capital expenditure is $30,000, and working capital is $10,000.
OCF = 60000 + 30000 + 10000
OCF = 100000
The operating cash flow is $100,000.
Cash Flow From Assets FAQ
What does cash flow from assets tell you?
Cash flow from assets tells you how much cash a company’s assets produced after accounting for capital spending and working capital needs. It is useful for seeing whether the company’s operations and assets are generating cash or consuming cash.
Is a negative cash flow from assets always bad?
No. A negative result is not always bad. It can happen when a company is investing heavily in equipment, facilities, inventory, or growth. However, if cash flow from assets stays negative for a long time without higher future cash flow, it may point to a cash management problem.
How is capital expenditure treated in this calculation?
Capital expenditure is subtracted because it represents cash spent on long-term assets. In this calculator, enter capital expenditure as a positive spending amount. The formula subtracts it from operating cash flow.