Where Did the Money Go?
While understanding revenue, expenses, and profit is crucial for any business owner, cash flow is an equally important metric in truly understanding a business’s financial health. Cash flow, representing the movement of money both in to and out of a business bank account, can be positive or negative, and will fluctuate as the business shifts and expands. A positive cash flow is just as it sounds—more money is coming into the account than leaving it. A negative cash flow, in contrast, means the exact opposite—more money is leaving the account than coming in.