Finance
What is Cash flow?
Cash flow is the movement of money into and out of a person or business over time. Positive cash flow means more coming in than going out; negative means the reverse. It's a key sign of financial health — even profitable businesses can fail if cash runs short.
See it, don’t just read it.
Watch a 2-minute lesson with voice + animation that explains cash flow.
Key things to understand
- 1It tracks actual money in vs money out over a period.
- 2Positive cash flow funds bills, growth, and emergencies.
- 3A business can be profitable on paper yet run out of cash.
- 4Managing the timing of income and expenses is crucial.
Frequently asked questions
- What is cash flow in simple terms?
- The money flowing in and out over time; positive means you're taking in more than you spend.
- Why is cash flow important?
- Without enough cash on hand, even a profitable business can't pay its bills and may fail.
- What's the difference between profit and cash flow?
- Profit is revenue minus costs on paper; cash flow is the actual timing of money moving in and out.