Cash Flow

Cash flow is the net amount of cash and cash-equivalents which the company receives or gives out by the way of payment to creditors. Cash flow analysis is often used to analyse the liquidity position of the company. It gives a snapshot of the amount of cash coming into the business, from where, and amount flowing out. It used to assess the quality of a company’s income, that is, how liquid it is, which can indicate whether the company is positioned to remain solvent.