DEFINITION of 'Initial Cash Flow'
The amount of money paid out or received at the start of a project or investment. This is generally a negative amount because projects often require a large initial capital investment by a company that will generate positive cash flow over time.
INVESTOPEDIA EXPLAINS 'Initial Cash Flow'
During the capital budgeting process, the attractiveness of a project is evaluated based on the cash flows generated by the project over its life. Using discounted cash flow analysis, the project's future value of the cash flows over its life are brought back to the present value to determine whether it is worthwhile for the company to pursue the project. Because the initial outlay is made at the start of the project (time zero), it isn't discounted.
For example, an oil company evaluating the attractiveness of a new refinery may budget for an initial outlay of $100 million to get the project started. This is then evaluated along with the future cash flows the project will generate over its life.

Net Present Value  NPV
The difference between the present value of cash inflows and ... 
Capital Budgeting
The process in which a business determines whether projects such ... 
Cash Flow
1. A revenue or expense stream that changes a cash account over ... 
Discounted Cash Flow  DCF
A valuation method used to estimate the attractiveness of an ... 
Payback Period
The length of time required to recover the cost of an investment. ... 
Earned Premium
The amount of total premiums collected by an insurance company ...

Fundamental Analysis
Discounted Cash Flow Analysis
Find out how analysts determine the fair value of a company with this stepbystep tutorial and learn how to evaluate an investment's attractiveness for yourself. 
Markets
What Is A Cash Flow Statement?
Learn how the CFS relates to the balance sheet and income statement as a part of a company's financial reports. 
Fundamental Analysis
What is a good interest coverage ratio?
Learn the importance of the interest coverage ratio, one of the primary debt ratios analysts use to evaluate a company's financial health. 
Fundamental Analysis
What is a bad interest coverage ratio?
Understand how interest coverage ratio is calculated and what it signifies, and learn what market analysts consider to be an unacceptably low coverage ratio. 
Active Trading Fundamentals
What is liquidity risk?
Learn how to distinguish between the two broad types of financial liquidity risk: funding liquidity risk and market liquidity risk. 
Fundamental Analysis
What is the difference between a capital gearing ratio and a net gearing ratio?
Understand the definition of gearing in the finance industry, the difference between net gearing and capital gearing ratios and how they are interpreted. 
Fundamental Analysis
What is the difference between interest coverage ratio and DSCR?
Understand the basics of the interest coverage ratio and the debtservice coverage ratio, including calculations and how each type reflects financial stability. 
Investing Basics
What is accrual accounting used for in finance?
Read about the accrual method of accounting, its uses and rules, and why it is considered so important for investors, lenders and managers. 
Investing Basics
What is the difference between accrual accounting and cash accounting?
Understand the differences between the two basic methods of accounting commonly used by businesses: cash accounting and accrual accounting. 
Investing Basics
When are expenses and revenues counted in accrual accounting?
Take an indepth look at the treatment of revenues and expenses within the accrual method of accounting and learn why many consider it superior to cash accounting.