Tuesday, 3 May 2011

Cash Flow

Cash flow is the total amount of money being transferred into and out of a business esp. as affecting liquidity.

The basic elements of cash flow are:
  • Starting cash -- This is your starting balance -- what you have on hand at the beginning of each month.
  • Cash in -- This is all cash received during the month, including sales, paid receivables, interest or cash from sales of assets or stock.
  • Cash out -- Includes all fixed and variable expenses.
  • Ending cash -- This is your ending balance. Add starting cash to cash in for total cash, then subtract cash out.

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