Cash flow is the amount of cash or cash-equivalent which the company receives or gives out by the way of payment to creditors.
The cash flow report is important because it informs the reader of the business cash position.
Formula to calculate cash flow.
Negative cash flow from investing activities might be due to significant amounts of cash being invested in the long-term health of the company.
Suppose the operating cash flow of a company is $ 50,000, while its investing cash flow is $ 40,000 and the financing cash flow is $ 25,000. Calculate the company’s cash flow.
Therefore, the company’s cash flow is $ 115,000.