Glossary

Cash flow is the money moving in and out of a business or an investment over a specific period of time. 💸

It's crucial for understanding a company's financial health, as it shows the company's ability to generate revenue, pay expenses, and fund future growth.

For example, if a small business earns $10,000 in revenue and has $7,000 in expenses for a month, its net cash flow would be $3,000 ($10,000 - $7,000).

Fun fact: Cash flow is often called the "lifeblood" of a business, ❤️ as it helps determine the company's solvency and ability to survive in the long run. A company may show a profit on paper, but if it doesn't have positive cash flow, it can struggle to pay its bills or grow.