cash-flow

Vocabulary Word

Definition

Cash flow refers to how money moves into and out of a business. If a store sells a product, they have money coming in. But when they pay salaries or rent, they have money going out.

Examples in Different Contexts

In financial planning, managing 'cash flow' involves balancing income and expenditures to avoid cash shortages. A financial planner might advise, 'Effective cash flow management is crucial for maintaining liquidity and financial stability.'

Practice Scenarios

Creative

Scenario:

The unpredictability of project payments puts a constraint on our financial planning. We need to ensure we have enough funds for ongoing projects.

Response:

Ensuring a positive cash flow through timely client payments should help with smoother financial planning.

Impact

Scenario:

Our recent investment has allowed us to expand our efforts, but we need to use our funds wisely to ensure sustainability.

Response:

An effective cash flow management plan can keep our sustainability efforts on track without compromising on scope.