Define: Cash Flow

UK Accounting Glossary

Definition: Cash Flow


Quick Summary of Cash Flow


Revenue or expense streams that change a cash account over a given period. Cash inflows arise from one of three activities: financing, operations and investing. Cash flow can also be negative, if a business spends more money than it takes in during a given period of time.



What is the dictionary definition of Cash Flow?

Dictionary Definition


In finance, cash flow refers to the amounts of cash being received and spent by a business during a defined period of time, usually tied to a specific project. In accounting, a cash flow projection sets out all the expected payments and receipts in a given period. Managers use cash-flow projections to arrange for employees and creditors to be paid at appropriate times.


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Full Definition of Cash Flow


Cash flow is a company’s net inflow or outflow of cash. A cash flow statement (formally known as the statement of cash flows) shows a company’s cash flow from its operating, financing, and investing activities during an accounting period, and it is now required under Generally Accepted Accounting Principles. More informally, cash flow often means cash flow from operations, which is computed as net income plus noncash charges, especially depreciation. Indeed, a quick definition of cash flow is net income plus depreciation. Analysts often emphasize cash flow, as opposed to net income, because cash is the most liquid and tangible asset, while net income necessarily includes charges and credits that do not affect the company’s bank account. Many analysts refine the concept of cash flow to mean “free cash flow,” the amount of cash available to the company after funding capital projects. In its simplest definition, free cash flow is net income plus depreciation less capital expenditures.


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Examples of Cash Flow in a sentence


A properly structured life insurance policy is a safe investment tool and can be utilized by people to build up their wealth and plan for future cash flow
Once you own several properties, you can sell some of them for capital gains and keep some as rentals for a steady cash flow.



Cite Term


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Page URL
https://payrollheaven.com/define/cash-flow/
Modern Language Association (MLA):
Cash Flow. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. February 22, 2020 https://payrollheaven.com/define/cash-flow/.
Chicago Manual of Style (CMS):
Cash Flow. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. https://payrollheaven.com/define/cash-flow/ (accessed: February 22, 2020).
American Psychological Association (APA):
Cash Flow. PayrollHeaven.com. Retrieved February 22, 2020, from PayrollHeaven.com website: https://payrollheaven.com/define/cash-flow/

Definition Sources


Definitions for Cash Flow are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • BusinessDictionary.com
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 4th February 2020.