cash flowcash flow
- The pattern of income and expenditures, as of a company or person, and the resulting availability of cash: The city improved its cash flow by borrowing against future revenues.
- The cash receipts or net income from one or more assets for a given period, reckoned after taxes and other disbursements, and often used as a measure of corporate worth.
cash flow - Investment & Finance Definition
The cash available to a business generated from its operations. A positive cash flow means that the net operating income is sufficient to cover expenses. A negative cash flow shows that expenses exceed revenues. A corporation issues a statement of cash flow with its quarterly and yearly earnings report. The statement shows where the company received its funds from and where they were spent. A popular measurement of cash flow, especially among Wall Street analysts, is free cash flow, which is cash flow left after expenses, capital expenditures, dividends, and debt service has been paid, although some companies may slightly vary what comprises free cash flow. The concept of free cash flow gained followers after the bear market that started in 2000 brought into question the quality of companies’ financial statements.