What Does Cash Flow Mean?
1. A revenue or
expense stream that changes a cash account over a given period. Cash
inflows usually arise from one of three activities - financing, operations
or investing - although this also occurs as a result of donations or gifts in
the case of personal finance. Cash outflows result from expenses
or investments. This holds true for both business and personal finance.
2. An accounting statement called the "statement of cash flows", which shows the amount of cash generated and used by a company in a given period. It is calculated by adding noncash charges (such as depreciation) to net income after taxes. Cash flow can be attributed to a specific project, or to a business as a whole. Cash flow can be used as an indication of a company's financial strength.
2. An accounting statement called the "statement of cash flows", which shows the amount of cash generated and used by a company in a given period. It is calculated by adding noncash charges (such as depreciation) to net income after taxes. Cash flow can be attributed to a specific project, or to a business as a whole. Cash flow can be used as an indication of a company's financial strength.
