Guiding Questions
In this blog, we’ll explore cash flow and why it is important. Many people hear the term but confuse it with profit or income. Common questions include:
- What is cash flow?
- Why does cash flow matter?
What Is Cash Flow?
Cash flow is the movement of money into and out of a business over a period of time.
Main Sections
Cash flow has two main parts.
- Cash Inflows: Money coming in, such as sales or payments received
- Cash Outflows: Money going out, such as rent, wages, and supplies
Why It Matters
Cash flow shows whether a business can pay its bills on time. Even profitable businesses can struggle if they do not manage cash flow properly.
Review
- What does cash flow track? Money coming in and out
- What are cash outflows? Money spent
- Why is cash flow important? It helps businesses stay operational
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