Net cash from operating activities refers to the relative change in a company's cash position from one period to the next created by operating activities. Operating cash flow offers a stronger depiction of company financial health than net cash from financing and investing activities.
During a month, quarter or year, a company conducts regular business operations that lead to cash inflows and cash outflows. Inflows from operations are generated through the sale of goods and services. Outflows include costs of goods sold and fixed operating expenses. The difference between the cash inflow and outflow is the net cash flow, or operating cash flow. A positive cash flow means the company is generating cash from operations that it can use for ongoing investment and development.
Sales and purchases of assets, dividend distributions and stock buybacks are among the non-operating activities that affect cash flow. While these activities impact the net cash flow for the period, they aren't typically ongoing activities like those included in the cash flow from operations calculation. One reason a company distributes dividends to shareholders is because leaders feel confident in the current cash position as well as ongoing net cash flow. Improving revenue and trimming COGS and fixed costs are primary means to improve net cash from operations.