1. What is Cash Flow?

Cash flow represents the net amount of cash and cash-equivalents moving into and out of a business or financial system. It's a key indicator of financial health and liquidity.

2. How Does the Calculator Work?

The calculator uses the cash flow formula:

Where:

• \( \text{Inflows} \) — Total cash inflows in dollars ($)
• \( \text{Outflows} \) — Total cash outflows in dollars ($)

Explanation: The calculation provides the net cash position by subtracting total outflows from total inflows.

3. Importance of Cash Flow Calculation

Details: Cash flow analysis is crucial for financial planning, budgeting, and determining the liquidity position of a business or project.

4. Using the Calculator

Tips: Enter all cash inflows and outflows in dollars. Values must be non-negative numbers.

5. Frequently Asked Questions (FAQ)

Q1: What constitutes cash inflows?
A: Cash inflows include revenue from sales, investments, loans, and any other sources of incoming cash.

Q2: What are considered cash outflows?
A: Cash outflows include expenses, purchases, loan payments, and any other cash expenditures.

Q3: What does a positive cash flow indicate?
A: Positive cash flow indicates that more cash is coming in than going out, which is generally a healthy financial position.

Q4: What does negative cash flow mean?
A: Negative cash flow means more cash is going out than coming in, which may indicate financial challenges if sustained.

Q5: How often should cash flow be calculated?
A: Cash flow should be monitored regularly, typically monthly for businesses, to maintain financial stability.