Enter the operating cash flow, net capital expenditure, and changes in net working capital to determine the cash flow from assets.
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Cash Flow From Assets Formula
The following equation can be used to calculate the cash flow from assets of a business.
CA = F – CE – WC
- Where CA is the cash flow from assets
- F is the operating cash flow
- CE is the capital expenditure (capital spend)
- WC is the change in working capital
Cash Flow From Assets Definition
Cash flow from assets is defined as the total monetary value or cash flow generated by the assets owned by an individual or company. This does not include value earned from appreciation of the assets.
Cash Flow From Assets Example
How to calculate cash flow from assets?
- First, Determine the operating cash flow.
Calculate the total operating cash flow of the business.
- Next, determine the total capital expenditure.
Calculate the total capital expenditure of the business.
- Next, determine the change in working capital.
Measure the change in working capital over the time period being analyzed.
- Finally, calculate the cash flow from assets.
Using the equation above, calculate the total cash flow from assets.
Cash flow from assets is a total cash flow generated directly from the assets of a company. Cash flow itself is simply the difference between operating cash flow and the capital expenditure plus the change in working capital.
The capital expenditure in the formula above is capital expenditures directly related to assets of the company. It should not include expenditures from other sources.