The flow of money into and out of the business. Understanding the Cash Flow of a business is as essential as understanding Profit; the two have to be managed separately.
See Cash Flow Statement for a description of the Cash Flows in and out of the business.
See also Cash Flow Forecast (CFF).
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Income|Outcome Learning Profit is like food: you need it for the business to grow and to be healthy and strong; but you don’t have to eat all the time. But Cash is like air – you need it constantly. If you run out, and cannot immediately get more, you die. Profit happens on the Income Statement. Cash Flow happens on the Balance Sheet. |
term list.