ACCOUNTING TERMS - ACCOUNTING DICTIONARY - ACCOUNTING GLOSSARY
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OPERATING CASH FLOW RATIO Definition
OPERATING CASH FLOW RATIO is a measure of how well current liabilities are covered by the cash flow generated from a companys operations. It is calculated: OCF = Cash Flow From Operations / Current Liabilities.
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LETTER OF AWARENESS is a formal letter written to a lender, normally by a parent company, acknowledging its relationship with another group company and its awareness of a loan being made to that company. It is the weakest form of comfort letter. Such letters do not constitute a guarantee, but may nevertheless involve a significant moral commitment on the part of the writer.
OPPORTUNITY COST is widely used in business planning in evaluating capital investment. A company measures the projected return against the anticipated return it would receive on a highest yielding alternative investment that contains a similar risk profile.