ACCOUNTING GLOSSARY
Cash Flow
Cash Flow
The movement of cash into and out of a business or investment.
What does Cash Flow mean?
The movement of cash into and out of a business or investment. Professionals may calculate, document or apply this concept differently depending on the transaction, accounting method, lender policy and governing documents. Borrowers should confirm the precise definition used in any term sheet or agreement.
Cash Flow in context
A profitable company may still face negative cash flow when customers pay slowly.
Why it matters in financing
Cash Flow can influence how a lender, investor or advisor evaluates risk, pricing, structure, repayment capacity or transaction economics. It should be considered together with the complete financial picture rather than used alone.
Related accounting terms
Educational information only. This definition is general, may not match a particular lender or contract, and is not financial, accounting, tax or legal advice.