Operating vs. Excess Cash
hey guys,
how do you calculate operating and excess cash (not talking about operating cash flow)? also whats the difference? Thanks
What are Operating and Excess Cash?
Cash is king, as some say, but it’s important to know what you’re measuring when you use various measures of cash. WSO user @kraken" shared these definitions to answer OP’s question:
- Operating Cash: Is the cash needed to cover day to day expenses
- Excess Cash: All cash minus operating cash
For more definitions, check out the WSO Financial Dictionary.
Recommended Reading
- Cash Question on DCF
- Excess Cash Flow Formula
- Valuation Non-operating Assets Operating-liabilites
- Operating Cash Flow
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operating cash is the cash needed to cover day to day expenses of a business, excess cash is the dif between all cash and op cash. There's a formula to estimate op cash., check pearl and rosenbaum book.
it's called EBITDA.......
haha
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