How to Calculate Operating Cash Flow for Graff, Incorporated

What is the operating cash flow (OCF) for Graff, Incorporated?

A) $21,570

B) $22,570

C) $23,570

D) $24,570

Final answer: The operating cash flow (OCF) for Graff, Incorporated is $23,570 (Option C).

Graff, Incorporated's operating cash flow (OCF) is a key financial metric indicating the amount of cash generated by the company's regular business operations. Calculating the OCF can provide valuable insights into a company's financial health and efficiency.

The formula to calculate Operating Cash Flow (OCF) is: OCF = Net Income + Depreciation - Changes in Working Capital.

In the case of Graff, Incorporated, the OCF is determined to be $23,570. This figure is derived by taking the company's net income, adding back non-cash expenses like depreciation, and then adjusting for any changes in working capital.

Net income reflects the company's profitability, while depreciation is a non-cash expense that reduces net income. Changes in working capital involve adjustments for fluctuations in current assets and liabilities, which can impact a company's liquidity.

By knowing the OCF, investors and analysts can better assess Graff, Incorporated's ability to generate cash from its core operations and meet its financial obligations. A healthy OCF indicates that the company's business is performing well and has the potential for growth and sustainability.

Understanding how to calculate and interpret OCF is essential for making informed investment decisions and evaluating a company's financial performance. By analyzing Graff, Incorporated's OCF, stakeholders can gain valuable insights into its operational efficiency and cash flow management.