Calculating cash flow: formulas, methods & examples

Key takeaways

• Basic cash flow formula: Cash flow = cash inflows minus cash outflows. This lets you see how much money is actually flowing in or out during a period.
• Cash flow can be calculated directly via actual cash inflows and outflows or indirectly from the net income. The indirect method adjusts for non-cash items and changes in working capital.
• The operating cash flow (OCF) shows whether the core business is self-sustaining. The free cash flow (FCF) is simply calculated as operating cash flow minus investments.
• The discounted cash flow (DCF) is not a type of cash flow itself, but a valuation method. It shows what expected future cash flows are worth today.
• For real estate, the simplified rule is: cash flow = rental income minus non-recoverable operating costs minus debt service. If you have multiple accounts, scenarios, or real-time data, software is better than Excel.

Why should you calculate cash flow?

Because revenue is not the same as money in the bank. A full order book is of little use if invoices are paid weeks later. Cash flow makes exactly this gap visible. Current data shows how relevant this is: 61% of small businesses worldwide struggle with cash flow problems (QuickBooks, 2019). At the same time, the payment gap in European B2B business has continued to widen: in 2026, invoices were paid on average about 20 days later than agreed (Intrum, 2026).

When you calculate cash flow, you answer three central questions: Is the core business self-sustaining? How much money remains for investments and debt repayment? And when is a bottleneck likely to occur? We explain exactly what cash flow is and which cash flow areas exist in detail in our pillar article Cash Flow: Definition, Importance, and Types. Here, we focus on the actual calculation.

The cash flow formula at a glance

The basic cash flow formula is simple: you subtract all cash outflows of a period from all cash inflows. In practice, there are two ways to do this: the direct and the indirect method. Both can determine operating cash flow, but they use different source data.

Basic cash flow formula

Cash flow = Total cash inflows − Total cash outflows

Direct method: Operating cash flow = Cash inflows from sales − Cash outflows to suppliers, employees, and other operating expenses.

Indirect method: Operating cash flow = Net income + non-cash expenses/income ± changes in working capital.

Which method you choose depends primarily on the data you have available. If you only have the annual financial statements, you usually use the indirect method. If you have access to real-time payment data, the direct method is more accurate and practical. We will now look at both in detail.

Calculating cash flow using the indirect method

The indirect method is frequently used in the cash flow statement, especially for cash flow from operating activities. According to DRS 21, operating cash flow can be presented directly or indirectly; however, cash flows from investing and financing activities are generally reported directly (DRSC, 2023).

With the indirect method, you start with the net income and adjust it for items that influenced profit without actual money changing hands. You also account for changes in working capital, such as receivables, inventory, and operating liabilities. This is how you get from the accounting result to the actual cash flow from ongoing business.

Indirect method: step by step

• Take the net income or net result as the starting value.
• Add depreciation and other non-cash expenses, as they reduce profit but do not cause a cash outflow.
• Subtract non-cash income, as it increases profit but does not trigger a cash inflow.
• Add increases in provisions, subtract decreases in provisions.
• Subtract increases in receivables and inventory, as this ties up cash. Decreases are added.
• Add increases in operating liabilities, as this provides short-term liquidity. Decreases are subtracted.

Example: calculating the indirect method

A company reports an annual net income of €150,000. Added to this are depreciation charges of €50,000. At the same time, accounts receivable have increased by €20,000 because customers paid later.

The operating cash flow is therefore €180,000. Depreciation is added back because, while it reduces profit, it does not result in an outflow of cash. The increase in receivables is deducted because that money is still with the customer. This example shows why cash flow and profit can diverge.

Calculating cash flow using the direct method

The direct method compares the actual cash inflows and outflows of a period directly, without taking the detour through net income. The result is particularly transparent, but it requires clean, up-to-date payment data. For this reason, it is primarily used internally for ongoing management.

Typical inflows and outflows:

• Inflows: Revenue from product and service sales as well as the settlement of outstanding receivables.
• Outflows: Wages and salaries, supplier invoices, rent, taxes, and other ongoing operating costs.

Example: calculating with the direct method

A company receives €500,000 from sales in one month and pays €300,000 for materials, wages, and ongoing costs.

The operating cash flow is €200,000. The advantage: You can see immediately which payment flows are driving the result. The disadvantage: The method is only as good as the data quality in your accounting.

Direct vs. indirect method compared

Calculating operating cash flow

Operating cash flow (OCF) is the cash flow from ongoing core business operations and is one of the most important cash flow metrics. It shows whether the business model is self-sustaining. It can often be calculated indirectly from net income by accounting for non-cash items and changes in working capital.

Formula: operating cash flow (indirect)

OCF = Net income + Depreciation + Increase in provisions − Increase in receivables − Increase in inventory + Increase in operating liabilities

A worked example with several adjustment items:

The operating cash flow is therefore €130,000. Depreciation and the increase in provisions are added back because they reduce profit but do not initially cause a direct cash outflow. Rising receivables and inventory are deducted because they tie up capital.

Gross and net cash flow: before or after taxes?

Whether cash flow is viewed before or after taxes depends on the chosen definition and calculation. For liquidity planning, it is crucial to know which taxes were actually paid, as these are real cash outflows. Therefore, in practice, you should always check whether your cash flow calculation already accounts for income taxes paid or if you need to deduct them separately.

If you want to include income taxes paid of €30,000 in the example, the simplified result is:

Operating cash flow after taxes = €130,000 − €30,000 = €100,000

This is not an additional type of cash flow, but rather a perspective on the same figure before or after tax payments.

Calculating Free Cash Flow

The free cash flow (FCF) shows how much money remains freely available after operating activities and the deduction of capital expenditures. It can be used to pay off debt, pay dividends, build reserves, or finance further growth. This makes it an important indicator of financial flexibility and a central foundation for company valuation.

Formula: free cash flow

Free Cash Flow = Operating Cash Flow − Capital Expenditures (CapEx)

Example: The operating cash flow is €130,000. In the same period, the company invests €50,000 in a new machine.

Es bleiben 80.000 € frei verfügbar. Ein stabiler oder wachsender FCF gilt als Zeichen gesunder Unternehmensführung. Ein negativer FCF ist in Wachstumsphasen normal, sollte aber bewusst geplant sein. Für junge Unternehmen ist in diesem Zusammenhang auch die Kennzahl Burn Rate und Cash Runway relevant.

Calculating Discounted Cash Flow (DCF)

The discounted cash flow (DCF) is not a specific type of cash flow, but rather a valuation method. The discounted cash flow method is used to determine the present value of future cash flows. In other words, it answers the question of what expected cash flows are worth today.

The basic idea: money that will only be received in a few years is worth less today than money that is available immediately. Therefore, future cash flows are discounted to their present value using an interest rate.

Formula: discounted cash flow

DCF = Σ [ Free Cash Flow in year t / (1 + i)^t ]

i = discount rate or cost of capital
t = year
Σ = sum over all years

DCF example: is a new production facility worth it?

A medium-sized household appliance manufacturer is evaluating a new production facility. The investment costs €5 million and has a lifespan of 10 years. An annual free cash flow of €1.8 million is expected, for example through additional cash-effective earnings and cost savings. The discount rate is 8%.

Each future cash flow is now discounted to its present value. The first few years illustrate the principle:

Over 10 years, the discounted cash flows add up to around €12.08 million (present value annuity factor 6.71 × €1.8 million). Since this present value is significantly higher than the investment costs of €5 million, the net present value is positive:

Net Present Value = €12.08 million − €5 million = €7.08 million

The investment is therefore financially attractive.

Weitere DCF-Anwendungsfälle

Dieselbe Logik lässt sich auf sehr unterschiedliche Investitionen anwenden. Immer geht es darum, künftige Cashflows abzuzinsen und mit den Investitionskosten zu vergleichen:

• E-Commerce, neues Lager- und Logistikzentrum: erwartete Cashflows aus geringeren Versandkosten, höherem Umsatz durch kürzere Lieferzeiten und weniger Retouren. Die Abzinsung zeigt, ob sich der Ausbau rechnet. Mehr dazu in unseren Lösungen für E-Commerce.
• Marketingagentur, Automatisierungssoftware: erwartete Cashflows aus weniger Zeitaufwand pro Projekt, potenziellen Neukunden und besserer Kundenbindung. Der DCF macht die Rentabilität sichtbar. Passend dazu die Lösungen für Agenturen.

Cashflow für Immobilien berechnen

Bei Immobilien misst der Cashflow, wie viel Geld eine vermietete Immobilie nach laufenden Kosten und Kapitaldienst tatsächlich abwirft. Er ist eine zentrale Kennzahl dafür, ob sich ein Objekt aus den laufenden Einnahmen selbst trägt oder ob Du monatlich Geld zuschießen musst.

Formel: Immobilien-Cashflow (vor Steuern)

Cashflow = Mieteinnahmen − nicht umlagefähige Bewirtschaftungskosten − Kapitaldienst (Zins + Tilgung)

Beispiel für eine vermietete Eigentumswohnung, Jahreswerte:

Die Immobilie erwirtschaftet einen positiven Cashflow von 7.000 € pro Jahr. Ein positiver Wert bedeutet, dass sich das Objekt aus Cashflow-Sicht selbst trägt. Ein negativer Wert, dann spricht man häufig von einem Zuschussobjekt, kann sich trotzdem lohnen, wenn Wertsteigerung oder steuerliche Effekte das ausgleichen. Er muss aber bewusst finanziert sein.

Cashflow-Berechnung in Excel

Für einzelne Objekte oder einfache Strukturen reicht oft eine Tabelle. In Excel legst Du je Zeile eine Position an, etwa Einzahlungen und Auszahlungen, und summierst am Ende. Eine fertige Excel-Vorlage zur Liquiditätsplanung nimmt Dir den Aufbau ab.

Excel ist kostengünstig und flexibel, stößt aber an Grenzen, sobald mehrere Konten, Szenarien oder tagesaktuelle Daten ins Spiel kommen. Dann steigt der manuelle Pflegeaufwand stark, und Fehler schleichen sich schneller ein.

Cashflow berechnen mit Software

Sobald Dein Unternehmen wächst, wird die manuelle Berechnung zur Belastung. Trotzdem erstellen noch 72 % der Treasury-Verantwortlichen ihre Cashflow-Prognosen manuell (PYMNTS, 2022), was Zeit kostet und fehleranfällig ist. Eine Software automatisiert die Berechnung, verbindet Bankkonten und liefert ein tagesaktuelles Bild, statt nur einen Blick in die Vergangenheit.

Praxis-Tipp aus dem Finanzalltag

„Die Formel zu kennen ist die eine Sache. In der Praxis scheitert es meist an der laufenden Pflege der Zahlen über mehrere Konten hinweg.“ Ein Tool wie Tidely verbindet Deine Bankkonten, kategorisiert Zahlungen automatisch und liefert die erste Cashflow-Prognose in rund 15 Minuten, inklusive einer 13-Wochen-Planung mit einem Klick. So wird aus der einmaligen Berechnung eine laufende Steuerung.

Der größte Mehrwert liegt in den Szenarioanalysen: Du siehst sofort, wie sich eine Investition, ein Umsatzeinbruch oder eine verspätete Zahlung auf Deinen Cashflow auswirkt. Wie das methodisch funktioniert, zeigen wir im Beitrag zu Szenarioplanung und Forecasting. 

Auch Automatisierung gewinnt im Cash-Management an Bedeutung: PYMNTS Intelligence zeigt im Time-to-Cash-Report 2025, dass digitale Workflows, Automatisierung und KI-gestützte Forecasts Cashflow-Prozesse spürbar beschleunigen; 71 % der befragten Unternehmen berichten von Cashflow-Verbesserungen (PYMNTS Intelligence, 2025).

Cashflow-Rechner: schnell selbst berechnen

Für eine erste Einschätzung genügt ein einfacher Rechner. Trag Deine Einzahlungen und Auszahlungen ein, und Du erhältst den Cashflow der Periode. Für den operativen Cashflow nutzt Du die indirekte Formel, also Jahresüberschuss plus nicht zahlungswirksame Posten, korrigiert um Veränderungen im Working Capital. Für den freien Cashflow ziehst Du die Investitionen ab.

Quick formulas for calculating it yourself

1. Simple cash flow: Cash inflows − Cash outflows
2. Operating cash flow: Net income + Depreciation ± Changes in working capital
3. Free cash flow: Operating cash flow − Capital expenditures

Conclusion: Calculate and actively manage your cash flow

Calculating cash flow isn't about complex math; it's about using the right formula and clean data. The indirect method is best for deriving figures from financial statements, while the direct method is ideal for day-to-day management. Free cash flow can be derived from operating cash flow; for investment decisions, future free cash flows can also be evaluated using the discounted cash flow method.

The key is to turn a one-off calculation into an ongoing practice. By regularly calculating your cash flow and planning for the future, you can identify bottlenecks early and make investment decisions on a solid foundation. For a deeper understanding of these concepts, check out our pillar article on cash flow as well as our guide to liquidity planning.

Frequently asked questions about calculating cash flow (FAQ)

How do you calculate cash flow?

The basic rule is: Cash flow = Cash inflows − Cash outflows. In practice, you calculate cash flow either directly from actual payment streams or indirectly from net income, adjusted for non-cash items and changes in working capital.

What is the difference between direct and indirect cash flow calculation?

The direct method compares actual cash inflows and outflows. The indirect method starts with net income and adjusts it for depreciation, provisions, and changes in receivables, inventory, and operating liabilities.

How do you calculate operating cash flow?

In simple terms: Operating cash flow = Net income + Depreciation + Increase in provisions − Increase in receivables − Increase in inventory + Increase in operating liabilities. It shows the cash generated from your core business operations.

What is free cash flow and how do you calculate it?

Free cash flow (FCF) shows how much money remains available after investments. In simple terms: FCF = Operating cash flow − Capital expenditures. It is important for debt repayment, distributions, reserves, and growth.

What is discounted cash flow (DCF)?

Discounted cash flow is not a type of cash flow itself, but a valuation method. It involves discounting expected future cash flows to their present value using a discount rate.

How do you calculate the cash flow of a property?

In simple terms: Cash flow = Rental income − Non-recoverable operating costs − Debt service (interest and principal). A positive value means the property is self-sustaining from a cash flow perspective and generates a surplus.

Can I calculate cash flow using Excel?

Yes, Excel is often sufficient for individual companies, simple structures, or real estate. As soon as you have multiple accounts, scenarios, or need real-time data, cash flow software is usually more efficient and less prone to errors.

Sources

• Creditreform Economic Research: Insolvencies in Germany, 2025
• Intuit QuickBooks: The State of Small Business Cash Flow, 2019
• Intrum: European Payment Report 2026
• Intrum: European Payment Report 2026 – Late payments are holding back European growth
• Accounting Standards Committee of Germany (ASCG): DRS 21 Cash Flow Statement, last revised 2023
• Gabler Business Dictionary: Discounted Cash Flow Method
• PYMNTS: 72% of Treasurers Still Do Cash Flow Forecasts Manually, 2022
• PYMNTS Intelligence: Time to Cash™: A New Measure of Business Resilience, 2025