What is Cash Flow?
Category: Business
1Definition
The movement of money into and out of a business, measuring actual liquidity rather than accounting profits.
2Context
More important than profit for survival. Profitable companies can fail if they run out of cash.
3Example
A company shows $1M profit but has negative cash flow because customers haven't paid their invoices yet.
⚠Common Trap
Positive cash flow doesn't mean profitable, and profitable doesn't mean positive cash flow. They measure different things.
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