Operating cash flow

Operating cash flow (flux de trésorerie opérationnel) is the cash generated by a company's core business operations — calculated from net income adjusted for non-cash charges (depreciation, provisions) and working capital movements under the indirect method. It is distinct from free cash flow to firm (FCFF), which further deducts capital expenditures. In financial due diligence, the reconciliation between operating cash flow and EBITDA is a powerful earnings quality check: large unexplained gaps signal working capital deterioration or revenue manipulation.

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Example: a company reports EBITDA of CHF 2.0 million but only CHF 0.4 million of operating cash flow — a CHF 1.6 million gap explained by an undisclosed working capital increase. The indirect method reconciliation reveals CHF 0.9 million of receivables build-up (aggressive revenue recognition) and CHF 0.7 million of inventory accumulation — both warning signs triggering deeper quality of earnings analysis.

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Hectelion reconstructs and analyses operating cash flows as a systematic earnings quality check in every financial due diligence engagement.