Cash Flow

The actual movement of money in and out of the business over a period. Positive cash flow means more came in than went out, regardless of accounting profit.

Why it matters

Profit is an opinion; cash is a fact. A profitable company can still die if cash arrives too late to pay the bills, so watching cash flow, not just the P&L, is what keeps a startup alive.

For example

A profitable-on-paper agency runs low on cash because clients pay 60 days late, a cash flow problem despite positive accounting profit.

Related terms

Free Cash Flow Working Capital Runway

Go deeper

See how founders actually handle this on Money, pricing and metrics, part of the Starting Up hub.

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