The net amount of cash and cash-equivalents moving into and out of a business. Positive cash flow indicates that a company's liquid assets are increasing, enabling it to settle debts, reinvest in its business, return to shareholders, pay expenses or provide a buffer against future financial challenges.
 | | | Cash Flow | | Cash flow is the net amount of cash and cash-equivalents moving into and out of a business. Positive cash flow indicates that a company's liquid assets are increasing, enabling it to settle debts, reinvest in its business, return money to shareholders, pay expenses and provide a buffer against future financial challenges. Negative cash flow indicates that a company's liquid assets are decreasing. Net cash flow is distinguished from net income, which includes accounts receivable and other items for which payment has not actually been received. Cash flow is used to assess the quality of a company's income, that is, how liquid it is, which can indicate whether the company is positioned to remain solvent. | | | Breaking it Down: | | The accrual accounting method allows companies to count their chickens before they hatch, so to speak, by considering credit as... Read More | | | | | | | | | Operating Cash Flow Margin | | A measure of the money a company generates from its core operations per dollar of sales. The operating cash flow can be found on the company's cash flow statement, and the revenue can be found on the income statement. Read More | | | | Non-Operating Cash Flows | | Non-operating cash flows are inflows and outflows of cash that are not related to the day-to-day, ongoing operations of a business. Read More | | | | | Direct Method | | The direct method is a method of creating the cash flow statement in which actual cash flow information from the company's operations segment is used, instead of accrual accounting values. Read More | | | | | | | | | | | | Follow Us: |  |  | | | | | | |
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