foxex: What is 'Cash Flow'?

Tuesday, July 30, 2019

What is 'Cash Flow'?

Cash flow is the net amount of cash and cash-equivalents being transferred into and out of a business. At the most fundamental level, a company's ability to create value for shareholders is determined by its ability to generate positive cash flows, or more specifically, maximize long-term free cash flow.

Breaking it Down:

Assessing the amounts, timing and uncertainty of cash flows is one of the...

Related to "Cash Flow"

How do net income and operating cash flow differ?

Net income is the profit a company has earned for a period while cash flow from operating activities measures, in part, the cash going in and out during a company's day-to-day operations.

Analyze cash flow the easy way

Learn the key components of the cash flow statement, how to analyze and interpret changes in cash, and what improved free cash flow means to shareholders.

What Is Cash Flow From Investing Activities?

Cash flow from investing is listed on a company's cash flow statement and includes any inflows or outflows of cash from a company's long-term investments.

Related Definitions

Operating Cash Flow Margin

Operating cash flow margin measures cash from operating activities as a percentage of sales revenue, and is a good indicator of earnings quality.

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.

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.

Retained Cash Flow - RCP

Retained cash flow includes remaining cash after expenses and investor have been paid for an accounting period.