1. What is Cash Flow?

Cash Flow represents the net amount of cash moving in and out of a business. Positive cash flow indicates more money coming in than going out, while negative cash flow shows the opposite.

2. How Does the Calculator Work?

The calculator uses the simple cash flow formula:

Where:

• \( Revenue \) — Total income from sales or services (USD)
• \( Expenses \) — Total costs and expenditures (USD)

Explanation: The formula calculates the difference between all incoming and outgoing cash during a specific period.

3. Importance of Cash Flow Calculation

Details: Cash flow analysis is essential for assessing a company's financial health, liquidity, and ability to meet obligations. It helps in budgeting and financial planning.

4. Using the Calculator

Tips: Enter revenue and expenses in USD. Both values must be positive numbers. The calculator will show the net cash flow.

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between cash flow and profit?
A: Profit is revenue minus expenses on an accrual basis, while cash flow tracks actual cash movements.

Q2: What is considered good cash flow?
A: Positive cash flow is generally good, but the ideal amount depends on business size, industry, and growth stage.

Q3: How often should cash flow be calculated?
A: Most businesses track cash flow monthly, but startups or volatile businesses may need weekly tracking.

Q4: What are operating vs. financing cash flows?
A: Operating comes from core business, financing from loans/investments. This calculator shows total cash flow.

Q5: Can cash flow be positive while showing a loss?
A: Yes, through non-cash expenses like depreciation or timing differences between sales and collections.