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What is Cash Flow?

When evaluating the financial health of a business, cash flow is one of the most important metrics. Cash flow represents the amount of money transferred in and out of an entity, representing the organization’s activities. The key to a healthy, profitable business is to have more inflow than outflow.
Cash flow is a simple concept that can get very complex very quickly. It’s not as simple as tracking revenue vs. expenses. Understanding cash flow takes comprehension of accrual basis accounting—specifically accounts payable and receivable. When and where cash comes from and goes to matters as much as the amounts. Here’s …read more […]