Cash Flow
The movement of money in and out of a business over a specific period of time.
Definition
Cash flow tracks the net amount of cash being transferred in and out of your business. Positive cash flow means more money is coming in than going out, while negative cash flow means the opposite. It's different from profit because it focuses on actual cash movement.
Types of Cash Flow
- Operating Cash Flow: Cash from core business operations
- Investing Cash Flow: Cash from investments and asset sales
- Financing Cash Flow: Cash from debt, equity, or dividends
Why It Matters
- Business Survival: Determines ability to pay bills and expenses
- Growth Funding: Shows ability to self-fund growth