Apr 5, 2025

Cash Flow

• The movement of money in and out of a business.

How do I remember it?

• Think of cash flow as a "business heartbeat." If cash is flowing in and out smoothly, the business stays alive. No cash flow? No heartbeat. 

• Cash in = from sales, investments, or loans. Cash out = for expenses like rent, salaries, or supplies.

Real world example

• For example, a clothing store earns $4,000 a month from sales but spends $3,350 on inventory, rent, and bills.

Positive cash flow = +$650 left over. If they earn $4,000 but spend $5,500?

Negative cash flow = -$1,500 → TROUBLE!