Cash Flow
Cash flow measures the actual money moving into and out of a business during a period. Unlike earnings (which include non-cash items), cash flow shows real liquidity. The cash flow statement breaks this into operating, investing, and financing activities.
Understanding the Concept
• Operating cash flow: cash from core business operations • Investing cash flow: capital expenditures, acquisitions • Financing cash flow: debt, dividends, stock buybacks • Free cash flow = operating cash flow minus capital expenditures
Real-World Example
A company reports $100M in earnings but only $60M in operating cash flow. The difference comes from non-cash items like stock compensation and working capital changes. Investors prefer consistent, strong cash flow because you can't pay dividends or buy back stock with accounting earnings, only real cash.
How Strykr Helps
Strykr's AI assistant helps you understand and apply Cash Flow concepts to your trading. Get personalized guidance and real-time market analysis to make better decisions.
Try Strykr Free