Cash Flow (Y10)

Cash flow is the movement of money in and out of the business

Cash flows into the business as receipts, e.g. from cash received from selling products or from loans.

Cash flows out of the business as payments, or expenses e.g. to pay wages, supplies and interest on loans.

Net cash flow is the difference between money in and money out.

The opening balance is the amount of money at the start of the period (it is always equal to the closing balance of the previous period)

The closing balance is calculated by adding the net cash flow to the opening balance