Cashflow
Also known as: cash flow
Cash flow is the degree and regularity with which money comes in and goes out of a business. Cash flow gives an indication of where a company is at. Measured cash flow is always a snapshot in time but can determine the value of a company.
Net cash flow is the difference between income and expenses in a given period. If more comes in than goes out then the cash flow is positive, if more goes out than comes in then the cash flow is negative. Cash flow gives an impression of a company's liquidity position. If a company does not have enough cash on hand, it will have a harder time meeting its payment obligations.
Cash flow is determined by several factors. Some of these factors include the quantity of products and/or services sold, the current selling price, the cost of raw materials and supplies, the cost of personnel and housing, and the payment behavior of customers. This last factor in particular makes cash flow a valuable indicator to supplement accounting. A company may generate sales and profits, but when it can dispose of these funds depends on when payments are received.