Cash Flow

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Dictionary Says

Definition of 'Cash Flow'

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.
Investopedia Says

Investopedia explains 'Cash Flow'

1. In business as in personal finance, cash flows are essential to solvency. They can be presented as a record of something that has happened in the past, such as the sale of a particular product, or forecasted into the future, representing what a business or a person expects to take in and to spend. Cash flow is crucial to an entity's survival. Having ample cash on hand will ensure that creditors, employees and others can be paid on time. If a business or person does not have enough cash to support its operations, it is said to be insolvent, and a likely candidate for bankruptcy should the insolvency continue.

2. The statement of a business's cash flows is often used by analysts to gauge financial performance. Companies with ample cash on hand are able to invest the cash back into the business in order to generate more cash and profit.

Video Definition

Search results for

'Cash Flow'

  • Understanding Cash Flow

    http://www.investopedia.com/video/play/what-is-cash-flow
    ... LIFA Level I; CSC; CPH. Definitions; Investing; Personal Finance; Active Trading;
    Forex; Videos /. Understanding Cash Flow. ... Related Videos. Understanding Cash Flow ...

  • Free Cash Flow Yield: The Best Fundamental Indicator

    http://www.investopedia.com/articles/fundamental-analysis/09/free-cash-flow-yield.asp
    ... Free Cash Flow Yield: The Best Fundamental Indicator. ... Think of this as free
    cash flow yield, and a better indicator than the P/E ratio. ...

  • Cash Flow From Investing

    http://www.investopedia.com/articles/financial-theory/11/cash-flow-from-investing.asp
    Cash flow analysis is a critical process for both companies and investors. Find
    out what you need to know about it. ... Cash Flow From Investing. ...

  • Understanding Free Cash Flow

    http://www.investopedia.com/video/play/understanding-free-cash-flow
    ... Videos /. Understanding Free Cash Flow. Next video: Understanding Mortgage-Backed
    Securities. Cash in the bank is what every company strives to achieve. ...

  • Analyzing The Price-To-Cash-Flow Ratio

    http://www.investopedia.com/articles/stocks/11/analyzing-price-to-cash-flow-ratio.asp
    ... Analyzing The Price-To-Cash-Flow Ratio. ... Calculating the cash flow per share
    (CFPS), a value of $5 is obtained ($1,000,000/200,000). ...

  • Free Cash Flow: Free, But Not Always Easy

    http://www.investopedia.com/articles/fundamental/03/091703.asp
    Free cash flow is a great gauge of corporate health, but it's not immune to
    accounting trickery. ... Free Cash Flow: Free, But Not Always Easy. ...

  • Understanding Liability-Adjusted Cash Flow Yield

    http://www.investopedia.com/articles/fundamental-analysis/11/understanding-liability-adjusted-cash-flow-yield.asp
    Learn why LACFY is a valuable metric for investors looking to make quick valuation
    calls on a company's stock relative to it's free cash flow history. ...

  • What Is A Cash Flow Statement?

    http://www.investopedia.com/articles/04/033104.asp
    What Is A Cash Flow Statement? May 23 2010 ... for. That is why it is added
    back into net sales for calculating cash flow. The only ...

  • Operating Cash Flow: Better Than Net Income?

    http://www.investopedia.com/articles/analyst/03/122203.asp
    Operating Cash Flow: Better Than Net Income? ... First, cash flow is harder to manipulate
    under GAAP than net income (although it can be done to a certain degree). ...

  • Analyze Cash Flow The Easy Way

    http://www.investopedia.com/articles/stocks/07/easycashflow.asp
    ... Analyze Cash Flow The Easy Way. ... (To read more about cash flow statements, see What
    Is A Cash Flow Statement?, Operating Cash Flow: Better Than Net Income? ...

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