Operating Income Greater than OCF

Can someone give me a few a examples how Operating Income can be negative but Operating Cash Flow positive?


Lots of depreciation, amortization, depletion, and accretion expenses.

Huge decrease in Accounts Receivable, Inventory, Prepaid Expenses.

Huge increase in Accounts Payable, Wages Payable, Taxes Payable, Interest Payable, Unearned Revenue.

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Spot-on, S2000magician. Great response!

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Thanks. Let’s try to apply this to a practical example.

Take gamestop… here are the last 3 years of operating income: (237.80) (399.60) (702.00)

here are the last 3 years of operating cash flow:
123.70 (414.50) 325.10

Would you say the biggest factor in this case is reduction in inventory?

I have no idea, because I haven’t looked at their financial statements.

Have a look at them, go through the list I gave you, and let us know what you find. If they’re using the indirect method for computing CFO (which is a 95% lock), you’ll see it pretty quickly on the cash flow statement.