What is cash flow?

Cash flow refers to the overall movement of cash and cash equivalents into and out of a company. It encompasses the inflow of funds received and the outflow of money spent. A company’s capacity to produce positive cash flows and optimize long-term free cash flow (FCF) is pivotal in enhancing shareholder value. FCF specifically denotes the residual cash generated from routine business activities, after deducting any capital expenditures. This emphasizes the significance of efficient cash management and sustained operational profitability for sustainable growth and investor returns.