Financial metrics2 min read
Cash flowGerman: Cashflow
Cash flow describes cash moving in and out over a period. For companies, it is often split into operating, investing and financing activities.
In plain language
Profit and cash flow differ because invoices are not always paid immediately and some expenses do not involve current cash payments. Positive operating cash flow can help fund investment or repay debt.
Let’s make it concrete
A company sells €5,000 on credit. Revenue may already be recorded even though the cash arrives later.
Simplified example for illustration.Worth understanding
Positive total cash flow can also come from new borrowing. Check where the money comes from.
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For further learning and reference:
Financial education for orientation. No individual investment, tax or legal advice.
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