Cash Flow From Operating Activities (CFO)

Cash Flow from Operating Activities is a line on the business’ cash flow statement, and tracks the amount of cash being generated from making and selling merchandise, or rendering services, whatever the business does. Increases in inventory decrease cash flow from the operations, and vice versa.

Cash Flow from Operating Activities is a category on the ledger. It also includes Cash Flow from Financing Activities, and Cash Flow from Investing Activities. Businesses can tweak this number a bit if they opt to take longer to pay off debts.

Of the ways to measure cash flows...financing, investing, and operating...this number is the most telling to investors, because it tells how much cash the business is making by rendering business, not by selling shares or equipment, things it can’t do all the time to generate cash.