Cash generated from operations — Accounting glossary

Cash generated from operations is an intermediate calculation of operating cash flows, commonly derived by adjusting an appropriate profit subtotal for non-cash items and working-capital movements. Further relevant cash flows are then presented as required. If trade receivables also rise by 5, the example amount falls to 105 because some recognised sales have not yet produced cash.

Worked example

Operating profit of 100 plus depreciation of 20 less an increase in inventory of 10 gives 110 before other adjustments.

Common mistake

Adding an increase in receivables rather than deducting it in an indirect reconciliation.

Where it appears in your exams

Qualification	Exam	Relationship	Period
ACCA	FA	Direct	September 2026–June 2027
ACCA	K1	Direct	July 2027–August 2028
CIMA	BA3	Direct	Official assessment-window verification pending
FIA	FFA	Direct	September 2026–June 2027

Related terms

Cash and cash equivalents
Financing activities
Investing activities
Operating activities

Also called: operating cash generated