Cash Flow
Cash flow refers to the inflow and outflow of the amount of cash or its equivalents in business. It determines the amount of cash consumed or generated for a specified period. Its analysis also identifies the existing sources of the flow of cash along with a possible scope of inflows. There are two types of cash flow: - Positive cash flow: When more money is earned than spent, indicating financial stability and growth potential.- Negative cash flow: When more money is spent than earned, often signaling potential financial troubles or a need for restructuring.Cash flow helps calculate important metrics like liquidity, cash conversion ratio, and provides a broad overview of financial health.
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