I read a lot about the definition but I can’t really get the hang of it.
Is it the cash that the company is left with at the end of the period? (Meaning the cash in their bank accounts *hypothetically*)
In: 14
> Is it the cash that the company is left with at the end of the period?
No. Two companies could have the exact same cashflow despite having vastly different amounts of cash.
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Imagine Adam has $1,000,000 cash in the bank. He uses $100 to buy some goods, which he later sells for $200. The cashflow of $100-out and $200-in results in a positive net cashflow of $100 over that time period.
Imagine Bob has $100 cash in the bank. He uses $100 to buy some goods, which he later sells for $200. The cashflow of $100-out and $200-in results in a positive net cashflow of $100 over that time period.
In this example, both Adam and Bob have the exact same cashflows despite Adam having ~$1,000,000 cash and Bob having ~$100 cash.
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