Accounting Glossary

What Is Cash Flow?


Cash Flow (Definition)

Cash flow is a measure of how much money a business has (or will have) at a given point in time. It reflects a business’s ability to pay its bills.

Cash flow shows how much money you have available to spend. You can check your bank balance to see what your immediate cash flow looks like but most businesses are keen to get a longer-term view.

What Is Cash Flow For A Business?

When assessing their cash flow, a business can look forward by doing a cash flow forecast (also known as a projection), or look backward by doing a cash flow statement.

  • Cash flow forecasts or projections account for upcoming bills and payments to predict how much money the business will have in the future.
  • Cash flow statements review the past month or year to show which parts of the business generated cash and which parts spent cash.


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