These three sources correspond to major sections in a company's cash-flow statement. Better cash-flow management begins with measuring business cash flow by looking at three major sources of cash: operations, investing, and financing. Operating cash flow (OCF) is the movement of money into and out of a business.Business owners can't very well manage what they can't measure. For business owners and stakeholders, KPIs give insight into important decisions, for example, they might inform a decision to pursue new product lines or even when internal processes, such as accounts receivable, need revamping. Many of these metrics help investors understand a company’s finances. Investors can calculate some of these metrics using figures from financial statements. The best cash flow metrics and KPIs tell you about your company's financial well-being and potential. A good rule of thumb is if your ratio is more than 1:1 of assets to liabilities, you can meet financial obligations - though there is some nuance to it, which is why it's vital to track multiple KPIs to get a better picture of financial state. This KPI looks at your current assets and liabilities. One of the most common is the current or working capital ratio. There are many cash flow ratios and KPIs you can use to better understand the financial footing of your company.
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