Business revision
Cash flow
Cash flow
Cash flow is the movement of money in and out of the business.
Profit and cash flow are two very different things. Cash flow is simply about money coming and going from the business.
How can a business improve it's cash flow?
A business can improve its cash flow by:
- Reducing cash outflows, eg by delaying the payment of bills, securing better trade credit terms or factoring.
- Increasing cash inflows, eg by chasing debtors, selling assets or securing an overdraft.