In the field of economics, it is defined as Cash Flow (a term of Anglo-Saxon origin), to describe cash flow, that is, everything that is related to the outflow and inflow of cash or cash in a period of time stipulated and for this reason it serves as a very useful tool to measure the liquidity that a commercial organization has.
Thanks to the cash flow, it is possible to obtain information regarding the account statements, that is, the money in it after subtracting the expenses, the interest payment, as well as the capital payment. It is important to note that this is a statement of account that includes data related to cash transactions and their equivalents.
In a business organization, cash flow can be used for different reasons, among which we can highlight the analysis of investment possibilities, liquidity anomalies and also to be able to measure the profitability that a business may have, these just to mention a few of its uses.
Cash flow can be classified into several types, the first is the so-called investment cash flow, which will be the cash entered or discharged, but investment capital expenditures must be taken into account , which can be beneficial. in the future. On the other hand, the operational cash flow is the cash that is issued or entered from some economic activity. Another type is the financing flow, this being the cash entered or issued, which results from the repurchase of shares, loan payments, etc.
As it has been possible to verify the cash flow is a tool that can indicate in its content the data referring to the amortizations, provisions and benefits obtained in a given period, which can be very useful and will allow to know if in the future a company will have enough cash to meet operational needs and profit from it. This tool is very useful in the business field, but especially for medium and small companies, since it is they that are commonly affected by liquidity deficiencies and therefore cannot cover expenses.
