Used by investors and bank lenders as well as business owners, it’s one of the most important ways of telling whether a business is healthy or not. Cash flow is concerned with the actual flow of money over a period of time.Ĭash flow can tell you a lot about the health of your business – and any other business, for that matter. Those things may affect the cash flow of a business, but they don't define it. It doesn't include capital in the bank, or credit from suppliers (at least not until payment is actually made) or debtor amounts (because the money isn't yours until it's been paid). It's a vital metric that can tell you a lot about the health of your business.Ĭash flow is all about the movement of money. Cash flow is the rate at which money passes into, through and out of a business over a given time period.
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