Cash Flow

Cash flow is the cycle of cash coming in and going out of a business or real estate investment. Cash flow management is required to keep a business …

Cash flow is the cycle of cash coming in and going out of a business or real estate investment. Cash flow management is required to keep a business or real estate investment out of the red, and essentially boils down to receiving incoming payments as quickly as possible while delaying outgoing payments as long as possible.

A cash flow analysis can reveal potential cash flow problems. Analyzing cash flow involves researching the number of customer payments, fees, interest earnings and other sources of incoming cash as compared to rent, salaries/wages, taxes, utilities and other outgoing cash. If total unpaid purchases exceed total sales due at the end of each month, this represents a cash flow problem that needs to be corrected.

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SOURCES

  1. Entrepreneur.com, “How to Better Manage Your Cash Flow”
  2. About.com, “Cash Flow Definition – Cash Flow Analysis”

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