Incoming Cash Flow
What is incoming cash flow? How is cash flow calculated?
Incoming cash flow is the amount of cash that came in to a business in a given period, such as a year.
Cash flow is calculated for a given period by subtracting actual cash going out by cash coming in. Cash flow does not equate with profit because expenses, for instance, are calculated at the time the purchase is made for profit purposes; however, for cash flow expenses are irrelevant unless the bill is actually being paid in the period considered (for instance, if a business purchases an item on August 31, it may count against the net profit for the month of August – however, it is unlikely the purchase would affect cash flow because the purchase will most likely not be paid for until September).