Corporate FinanceFinancial Glossary
Cash Flow
Definition
The net amount of cash moving in and out of a business or personal financial life during a given period. Positive cash flow means more money coming in than going out; negative cash flow means the opposite. In corporate finance, cash flow is categorized into operating, investing, and financing activities.
Why It Matters
A company can show accounting profits while having negative cash flow — this is a red flag. For personal finance, positive monthly cash flow is the foundation of all saving and investing. If your outflows exceed inflows, no investment strategy can help until you fix the cash flow problem first.