Glossary Terms

Cash Flow

Cash flow is an accounting term representing the difference in the amount of cash a business has at the beginning of a period compared to the amount it has at the end of that period.

Cash flow is an accounting term representing the difference in the amount of cash a business has at the beginning of a period compared to the amount it has at the end of that period.

If the closing balance is higher than the opening balance, the business is considered “cash flow positive.” If the balance is lower, the business is considered “cash flow negative.” If a business's cash flow is negative, they may need to consider cash flow financing.

While the goal of most businesses is to be cash flow positive, cash flow is not a definitive indicator of business success.