Fundamental Glossary / Cash Flow Metrics
Cash Flow Margin
Operating cash flow as a percentage of revenue.
Formula
Operating cash flow / revenue.
What it means
Cash flow margin is the cash cousin of net or operating margin. It says how many paise of cash the business collects per rupee of sales.
It moves with working capital, so it is lumpier than the profit margin.
How to read it
A profit margin of 12% and a cash flow margin of 4% means most of the accounting profit is not cash this year. The gap is the question.
What to watch
Do not annualise a single quarter in a seasonal business. Four quarters, or the same quarter last year, are the fair comparisons.
This note explains the term. It is not a research recommendation, a target price, or a comment on any security. Ratios and regulatory thresholds change; use the latest filing or circular for a live figure.