Business of Radiology 101
Cash Flow: Operating Activities
Cash flow from operating activities is the cash generated or expended as a result of a company’s core business activities. Operating activities, and therefore cash flow, occurs on an on-going or daily basis, but excludes long-term investments. In simple terms, Cash Flow from Op. Activities = Op. Revenues - Op. Expenses
Examples of ‘Operating Revenues’ include payments received from customers or insurance companies. Examples of ‘Operating Expenses’ include payments to suppliers and payments to employees. Radiology practices try to keep a positive net cash flow from their operating activities in order to remain solvent, or viable.