Definition of Cash Flow

At the behest of the accounting, is called cash flow or, failing that, cash flow, the account statement that reflects and tells us how much cash we have left after having paid the expenses, interest and payment for the capital. So, more formally, cash flow is an accounting-type statement that gives us information about the cash movements that there have been and their equivalents..

Operational activities, investments and the financing They are part of the categories of the cash flow statement. For example, him operational cash flow it will indicate to us the cash that has been received or spent as a result of the daily activities that a company maintains.
For his part, investment cash flow, indicates the movements in terms of investments made. And the financing cash flow, is responsible for considering the cash that results from the receipt or payment of loans, payment of dividends, issuance or repurchase of shares.

From all the aforementioned it follows then that a company to guarantee its good

functioning at an economic level, that is, to guarantee itself the necessary liquidity to face the day-to-day and the unforeseen events that businesses sometimes generate, you will need to carefully address the issue of cash flow and analyze it. The realization A projection about the states of the aforementioned categories will serve and will be of great help to know whether or not you have the necessary cash to cover expenses.

Because the cash flow, preeminently, what allows is to make forecasts to avoid those solutions of urgency How can it be to go to a financier to give us a loan to help us get out of a pressing situation, a situation that of course can lead to the payment of incredible and very high interests.

The management of finance of any company, with the cash flow forecast made to conscience and the day will undoubtedly contribute to the cost effectiveness that every company aspires to achieve.

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