Cash Flow from Operations
Cash Flow from Operations is a section on the Cash Flow Statement referring to cash generated or used by the company’s core business operations during a specific period.
It excludes cash flows from investing and finance activities and adjusts Net Income for non-cash items.
Example
Net Income = $500
(+) $50 D&A
(+) $50 Stock-Based Compensation
(+) $50 Deferred Taxes
(-) $50 Increase in Current Assets
(+) $50 Increase in Current Liabilities
Cash Flow from Operations = 500 + 50 + 50 + 50 - 50 + 50 = $650
In the room
CFO is the heart of the three-statement question. You start at net income, add back the non-cash charges, adjust for working capital. Being able to explain why each adjustment exists, not just that it exists, is what separates a strong answer from a recited one.