Incremental Cash Flow

Loading the player...

What is an 'Incremental Cash Flow'

An incremental cash flow is the additional operating cash flow that an organization receives from taking on a new project. A positive incremental cash flow means that the company's cash flow will increase with the acceptance of the project.

BREAKING DOWN 'Incremental Cash Flow'

There are several components that must be identified when looking at incremental cash flows: the initial outlay, cash flows from taking on the project, terminal cost or value and the scale and timing of the project. A positive incremental cash flow is a good indication that an organization should spend some time and money investing in the project.

RELATED TERMS
  1. Initial Cash Flow

    The amount of money paid out or received at the start of a project ...
  2. Cash Flow

    The net amount of cash and cash-equivalents moving into and out ...
  3. Non-Operating Cash Flows

    Cash flows (inflows and outflows) that are not related to the ...
  4. Unconventional Cash Flow

    A series of inward and outward cash flows over time in which ...
  5. Operating Cash Flow Margin

    A measure of the money a company generates from its core operations ...
  6. Operating Cash Flow Ratio

    A measure of how well current liabilities are covered by the ...
Related Articles
  1. Economics

    Understanding Incremental Cash Flow

    Incremental cash flow is the additional operating cash flow an organization expects to generate from a new project.
  2. Professionals

    Incremental Cash Flows

    This is another important part of the planning process.
  3. Professionals

    Capital Investment Decisions

    In this section, we'll examine various components of a company's capital investment decisions, including project cash flows, incremental cash flows and more.
  4. Professionals

    Cash Flow and NPV Applications

    CFA Level 1 - Cash Flow and NPV Applications. Learn how incremental cash flow analysis can provide firms with an alternative method of evaluating capital budgeting projects.
  5. Markets

    Fundamental Analysis: The Cash Flow Statement

    By Ben McClureThe cash flow statement shows how much cash comes in and goes out of the company over the quarter or the year. At first glance, that sounds a lot like the income statement in that ...
  6. Professionals

    10 Ways to Improve Cash Flow in Construction

    Improving cash flow in construction requires some sector-specific strategies.
  7. Fundamental Analysis

    Analyze Cash Flow The Easy Way

    Find out how to analyze the way a company spends its money to determine whether there will be any money left for investors.
  8. Forex

    Understanding Cash Flow

    Learn about the different types of cash flows and the importance for businesses to properly manage their cash flows.
  9. Professionals

    Cash Flow Is King: How to Keep it Running

    Why is cash flow so important, and what steps can a business take to improve it?
  10. Fundamental Analysis

    Cash Flow From Investing

    Cash flow analysis is a critical process for both companies and investors. Find out what you need to know about it.
RELATED FAQS
  1. What's the difference between free cash flow and operating cash flow?

    Learn the difference between free cash flow and operating cash flow. Explore how analysts use earnings and cash flow when ... Read Answer >>
  2. Are taxes calculated in operating cash flow?

    Learn how taxes are involved with the calculations for operating cash flow, and find out about the importance of operational ... Read Answer >>
  3. What is the difference between cash flow and fund flow?

    See how cash flow and fund flow differ from each other, and why fund flow can be used very differently by accountants and ... Read Answer >>
  4. What are some examples of how cash flows can be manipulated or distorted?

    Read about some of the most common accounting techniques that can be used to manipulate the operating cash flow on a company's ... Read Answer >>
  5. What is the difference between cash flow and free cash flow?

    Learn about the main differences between cash flow and free cash flow. In addition to the differences, learn how to calculate ... Read Answer >>
  6. What is the difference between the operating the operating cash flow ratio and operating ...

    Find out more about the operating cash flow ratio, the operating cash flow margin, how to calculate these ratios and the ... Read Answer >>
Hot Definitions
  1. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  2. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  3. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  4. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
  5. Generally Accepted Accounting Principles - GAAP

    The common set of accounting principles, standards and procedures that companies use to compile their financial statements. ...
  6. DuPont Analysis

    A method of performance measurement that was started by the DuPont Corporation in the 1920s. With this method, assets are ...
Trading Center