Cashflow
In finance, cash flow refers to the amounts of cash being received and spent by a business during a defined period of time, sometimes tied to a specific project.
In accounting, a cash flow projection sets out all the expected payments and receipts in a given period. Managers use cash-flow projections to arrange for employees and creditors to be paid at appropriate times.
Example
The cash flow for this example is $40.00.Note that we only include sales income which was paid for in cash. This is very important for describing the health of the business because although you may have made $1000 in sales, you still may have to wait to collect that cash (due to the terms you have with the customer). Even though you may be showing high profits on the Income statement, you may have no cash to show for it. This is why when determining the health of a business you must look at the Income statement, Balance Sheet, and the Cash Flow statement.
This article is licensed under the GNU Free Documentation License. It uses material from the Wikipedia article "Cash flow"
Contact
Highlights from 999Today.com
-
Michelle Obama praises husband at Democratic convention
The US Democrats have kicked off their national convention in Denver, with a passionate speech by Michelle Obama, the wife of the soon-to-be Democratic presidential nominee.
-
Travel tips to beat the credit crunch
Tots to Travel, experts in family-friendly travel, have these tips on how to cut costs when travelling with children.
-
Fat Duck hatches a perfect 10
Heston Blumenthal's restaurant The Fat Duck has achieved the rare feat of scoring a perfect ten out of ten in The Good Food Guide 2009.