Cash Flow

What does it mean?
The amount of cash a company generates and uses during a period, calculated by adding noncash charges (such as depreciation) to the net income after taxes. Cash Flow can be used as an indication of a company's financial strength. It is also sometimes referred to as the "money value" of trades in a stock during a trading day.

In Other Words...
Cash flow is crucial to companies, having ample cash on hand will ensure that creditors, employees, and others can be paid on time.

Related Links
Introduction to Fundamental Analysis - Here's an easy-to-understand tutorial on the techniques of analyzing a company's financial statements, including the annual and quarterly reports, the auditor's report, and much more.

Related Terms
Burn Rate | Cash Flow Per Share | Cash Flow Return on Investment (CFROI) | Discounted Cash Flow (DCF) | Funds from Operations | Net Income

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