The operating cash flow ratio is calculated by dividing operating cash flow by current liabilities. Operating cash flow is the cash generated by a company's normal business operations.
The operating cash flow ratio is a measure of how readily current liabilities are covered by the cash flows generated from a company's operations. This ratio can help gauge a company's liquidity in the short term.
Using cash flow as opposed to net income is considered a cleaner or more accurate measure since earnings are more easily manipulated.