Cash flow

The cash that actually moved in and out

In detail

Cash flow is the money that really entered and left the company during a period, split into operating, investing, and financing activities. Profit includes amounts not yet collected, such as receivables, so a company can report profit while its cash shrinks. Spotting that gap is what the cash flow statement is for.

Example

Net income of $30 million alongside a $40 million rise in receivables can leave operating cash flow negative.

Related terms

Free cash flow Net income Income statement

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