Cash flow refers to the total amount of money being transferred into and out of a business, particularly in a given period. It is a critical measure of a company’s financial health, indicating how well it generates cash to pay its debts and fund its operating expenses.

Characteristics
– Positive Cash Flow: Indicates that a business is bringing in more cash than it is spending, which is essential for growth and sustainability.
– Negative Cash Flow: Occurs when a business spends more cash than it receives, which can lead to financial difficulties if it persists over time.
– Operating Cash Flow: Cash generated from the core business operations, excluding any income from investments or financing activities.
– Investing Cash Flow: Cash used for investing in assets like equipment or property, or cash received from the sale of such assets.
– Financing Cash Flow: Cash received from or paid to investors and creditors, including loans, dividends, and equity financing.

Examples
– A retail store generates cash flow from sales of products, while its cash outflows include rent, salaries, and inventory purchases.
– A tech startup may have negative cash flow during its initial years due to high investments in research and development, but it could achieve positive cash flow once it starts generating revenue from its products.