CompanyGraph
Use to find companies where this pattern is active.
Operating cash flow has trended upward on a 6-year regression while total current assets have decreased year-over-year across the trailing four years and depreciation is large relative to operating cash flow. The composition note: cash flow is rising while the current-asset base is shrinking and depreciation is a large share of the cash flow line.
State
Operating cash flow trending upward while total current assets shrink and depreciation is large relative to operating cash flow
Emergence
Operating cash flow has trended upward on a 6-year regression while two balance-sheet/cash-flow composition observations sit at elevated readings: the total current-asset line has decreased year-over-year over the trailing four years, and depreciation is large relative to operating cash flow. The composition note: the cash flow trajectory is rising, while the current-asset base feeding it is shrinking and a meaningful share of the gap between earnings and cash is depreciation. These observations do not directly demonstrate that working capital release is driving cash flow growth — that requires a more specific decomposition.
Limits
This interpretation identifies a co-occurrence between rising operating cash flow and a shrinking current-asset base, not a working-capital-release proof. It does not measure net working capital (which would also include current liabilities), compute the change in working capital line of the cash flow statement, predict cash flow reversal, or claim management is squeezing receivables/inventory/payables. The 'current-assets-decreased-yoy-4y' observation tracks only total current assets, ignoring liabilities. The 'depreciation-to-ocf' observation measures only the depreciation component of accruals, not the full Sloan accrual figure.
Explanation
This diagnostic clarifies a composition reading: Surface reading: Rising operating cash flow suggests the business is generating more cash from operations. Structural reality: Operating Cash Flow Trending Upward (6-Year) confirms the regression slope of operating cash flow is positive over six years. Meanwhile Total Current Assets Decreased Year-Over-Year (4 years) indicates the current-asset base has been shrinking. And Depreciation Relative to Operating Cash Flow sits at an elevated reading. The combination shows rising cash flow on a shrinking current-asset base with depreciation as a meaningful share of that cash flow. The observations do not directly demonstrate working-capital release as the source — that would require the cash-flow-statement change-in-working-capital line.
Interpretation
This interpretation identifies a co-occurrence pattern between rising operating cash flow, a shrinking current-asset base, and elevated depreciation share of cash flow. It does not claim cash flow is artificial, predict reversal, prove working-capital release as the source, recommend action, or measure full Sloan accruals. The composition is worth noting; the causal story is not directly observed.
Required Observations
Current Assets Decreased Yoy 4y
Total current assets have decreased year-over-year across the most recent 4 fiscal years.
Depreciation To Ocf
Depreciation as a share of operating cash flow.
Operating Cash Flow Trend
Operating cash flow has trended upward over the past 6 years (slope positive, normalized by current revenue).