Cash flow: Refers to the inflow and outflow

Cash flow refers to the inflow and outflow of cash and cash equivalents. Cash-flow is generated by business operations, investments, and financing. It determines a business's cash position and cash availability. Analyzing a company's cash-flow provides critical information about its financial health, business activities, and reported earnings. What Is Cash Flow? A cash flow (CF) shows inflows (receipts) and outflows (payments) of cash during a particular period. In other words, it summarizes the sources and applications of cash during a particular period. In addition, it analyzes the reasons for changes in the balance of cash between the two balance sheet dates. The cash flow statement would track a company's actual cash inflows and outflows (cash and cash equivalents). The fund flow documents the inflow and outflow of funds from the company. Cash flow statements provide insight into a company’s stability, health, and growth potential. In this article, you’ll learn why they’re important, what comprises them, how to make a cash flow statement, how to calculate them (with examples!), how to read them, and more.