In: Finance
Cash flow is the net amount of cash and cash-equivalents being transferred into and out of a business. At the most fundamental level, a company’s ability to create value for shareholders is determined by its ability to generate positive cash flows, or more specifically, maximize long-term free cash flow (FCF).
Positive cash flow indicates that a company's liquid assets are increasing, enabling it to settle debts, reinvest in its business, return money to shareholders, pay expenses and provide a buffer against future financial challenges.
PROJECTED CASH FLOW
A projected cash flow statement is used to evaluate cash inflows and outflows to determine when, how much, and for how long cash deficits or surpluses will exist for a business during an upcoming time period.
A projected cash flow statement is best defined as a listing of expected cash inflows and outflows for an upcoming period (usually a year).
INVESTED CASH FLOW
Cash flow from investing activities includes any inflows or outflows of cash from a company's longterm investments. The cash flow statement reports the amount of cash and cash equivalents leaving and entering a company.The sections of the cash flow statement are-Cash from operating activities,Cash from investing activities, cash from financing activities.