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