Cash-Flow
Movement of money in/out of business.
Formula
Net Cash-Flow = Total Inflows − Total Outflows
Real World
In 2020, many UK hospitality businesses like Wetherspoons had positive profits on paper but faced severe negative cash-flow as venues closed and rent payments continued without any revenue coming in.
Exam Focus
Distinguish cash-flow from profit — a business can be profitable but still fail due to poor liquidity.
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