Short definition: Cash flow refers to the inflow and outflow of cash and cash equivalents (cash and near-cash assets) of a company within a specific period.
Explanation: Cash flow provides information about the solvency and financial health of a company. A positive cash flow means that more money is flowing into the company than out, while a negative cash flow may indicate financial difficulties.
Example: A company generates revenue through the sale of products, while expenses are incurred for salaries, rent, and materials. The difference between revenue and expenses results in the cash flow.
Additional information (optional): There are different types of cash flow, such as operating cash flow, investing cash flow, and financing cash flow.