cash flow

n.

1. The pattern of income and expenditures, as of a company or person, and the resulting availability of cash: The city improved its cash flow by borrowing against future revenues.
2. The cash receipts or net income from one or more assets for a given period, reckoned after taxes and other disbursements, and often used as a measure of corporate worth.

cashflow cash'-flow' (kăsh'flō') adj.

1. A revenue or expense stream that changes a cash account over a given period. Cash in-flows usually arise from one of three activities - financing, operations or investing - though they also occur as a result of donations or gifts in the case of personal finance. Cash out-flows result from expenses or investments. This holds true for both business and personal finance.

2. An accounting statement - the statement of cash flows - that shows the amount of cash generated and used by a company in a given period, calculated by adding non-cash 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:
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.

Related Links:
Find out how a company spends its money and whether there will be any left over for investors. Analyze Cash Flow The Easy Way
Tune out the accounting noise and see whether a company is generating the stuff it needs to sustain itself. The Essentials Of Cash Flow
Learn how the CFS relates to the balance sheet and income statement as a part of a company's financial reports. What Is A Cash Flow Statement?
Differences between accrual accounting and cash flows show why net income is easier to manipulate. Operating Cash Flow: Better Than Net Income?
Pressure to be the best can sometimes push corporations to cheat. Learn how they do it and how to spot it. How Some Companies Abuse Cash Flow
Find out how analysts determine the fair value of a company with this step-by-step tutorial and learn how to evaluate an investment's attractiveness for yourself. Discounted Cash Flow Analysis
This measure may have its benefits, but it can also present earnings through rose-colored glasses. A Clear Look At EBITDA
Learn what it means to do your homework on a company's performance and reporting practices before investing. Advanced Financial Statement Analysis

Finance: analysis of all the changes that affect the cash account during an accounting period. Cash flow from Operations is one factor in a breakdown, usually shown as sources of cash and uses of cash.

Investment: net income plus depreciation and other noncash charges. In this sense, it is synonymous with Cash Earnings. Investors focus on cash flow from operations because of their concern with a firm's ability to pay dividends. See also Cash Budget.

Example for a real estate investment:

Potential gross income $10,000

Less: Vacancy and collection allowance - 1,000

Add: Miscellaneous income + 500 Effective gross income 9,500

Less: Operating expenses - 3,000

Less: Replacement reserve - 500 Net operating income 6,000

Less: Interest - 4,000

Less: Principal payment - 500 Cash flow $ 1,500

Cash flow is not the same as Taxable Income. Some items subtracted from cash flow to derive Taxable Income are money received from loans, Depreciation, and Amortization deductions. Some items that are added to cash flow to derive taxable income are loans retired and purchases of long-term assets.

Periodic amounts available to an Equity investor after deducting all periodic cash payments from rental income. See Before-Tax Cash Flow, Cash Throw-Off, After-Tax Cash Flow.
Example: Table 10.

n

The reported net income of a corporation plus amounts charged off for depreciation, depletion, amortization, and extraordinary charges to reserves, which are bookkeeping deductions not paid out in actual dollars and cents. A measurement tool used in recent years to offer a better indication of the ability of a company to pay dividends and finance expansion from self-generated cash than the conventional reported net income figure.

For more information on cash flow, visit Britannica.com.

This entry is from Wikipedia, the leading user-contributed encyclopedia. It may not have been reviewed by professional editors (see full disclaimer)

Dansk (Danish)
n. - et firmas ind- og udbetalinger

Français (French)
n. - marge brute d'autofinancement, cash flow

Deutsch (German)
n. - (econ.) Cashflow

Ελληνική (Greek)
n. - (οικον.) χρηματική ροή

Italiano (Italian)
flusso di cassa, liquidità

Português (Portuguese)
n. - fluxo (m) de caixa

Русский (Russian)
брутто-показатель самофинансирования

Español (Spanish)
n. - flujo de efectivo

Svenska (Swedish)
n. - kassaflöde

中文（简体）(Chinese (Simplified))
现金流转

中文（繁體）(Chinese (Traditional))
n. - 現金流轉

한국어 (Korean)
n. - 현급 유출입

日本語 (Japanese)
n. - キャッシュフロー, 利潤と減価償却引当金の合計

עברית (Hebrew)
n. - ‮תזרים מזומנים‬

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