Glossary - Cash Flow
Cash Flow refers to the net amount of cash and cash-equivalents being transferred into and out of a business. It is a key indicator of a company's financial health, showing if a company is able to generate enough cash to maintain or grow its operations or if it needs external financing.
Also known as
- Cashflow
- Cash Flow Statement
Use cases examples
- Financial Statements: The Cash Flow Statement is one of the three key financial statements used to evaluate a company's financial performance and health, alongside the income statement and balance sheet.
- Investor Reporting: In quarterly investor reports, companies often include a section on cash flow to highlight their liquidity, operational efficiency, and overall financial stability.
Considerations for investors
- Investors should analyze a company's cash flow closely to assess its ability to sustain operations, expand, and generate returns on investment without additional financing.
- Evaluating the sources of cash flow (operational, investing, and financing) helps investors understand how the company is generating cash and if it's sustainable in the long term.
Considerations for founders
- Understanding the difference between profitability and cash flow is critical for founders to avoid running out of cash despite being profitable on paper.
- Regularly forecasting cash flow is essential for effective financial planning and ensuring the business has enough cash to cover upcoming obligations.
Get to know our world class tools and services
Transform your operations with world class tools
We have created several tools to help investors spot the best opportunities and manage their portfolio.
Let's unlock your business potential with Automations
Embrace the future with our tailored subscription service that combines strategic planning and practical implementation.