Cash flow refers to the increase or decrease in the amount of cash available to a business, institution, or individual over a period of time. There are several types of cash flows that are important for financial analysis and running a business. Cash flow diagrams visually represent income and expenses over time using a horizontal line with markers indicating expenses and costs at different time intervals, usually at the end of the year. Certain cash flows like rent are handled differently by indicating them at the beginning of the period instead of the end.

1. CASH FLOWS
MELVIN C. BINDOY
BSEE 2B

2. WHAT IS CASH FLOW?
• Cash Flow (CF) is the increase or decrease in the amount of money a
business, institution, or individual has. In finance, the term is used to
describe the amount of cash (currency) that is generated or
consumed in a given time period. There are many types of CF, with
various important uses for running a business and performing
financial analysis.

6. CASH FLOW DIAGRAM
• Cash flow diagrams visually represent income and expenses over some time
interval. The diagram consists of a horizontal line with markers at a series of time
intervals. At appropriate times, expenses and costs are shown.
• Note that it is customary to take cash flows during a year at the end of the year,
or EOY (end-of-year). There are certain cash flows for which this is not
appropriate and must be handled differently. The most common would be rent,
which is normally taken at the beginning of a cash period. There are other pre-
paid flows which are handled similarly.

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