Accounts and Finance

"Cash flow is an incoming and outgoing stream of money. The money earned is inflow, while money spent is outflow, and if the inflow is greater than the outflow, it is a positive cash flow i.e an amount left over at the month's end that can be invested. If it's a negative cash flow, that means money is being spent more than being earned. 

Calculating cash flow:

1. Create a spreadsheet: Create columns for operating activities, financing activities, and investing activities, and then open all the bank statements for the month the cash flow being calculated for. Here, the objective is to determine whether one had a positive or negative cash flow for this month.

2. Calculate the net cash flow from operating activities: Add up the inflow or money that came in from daily operations and delivery of goods and services. Include income from customers from collection of receivables and cash interest and dividends that are received.

3. Determine net cash flow from financing activities: Add up all inflow that generated from debt or equity financing which includes money spent or received from stocks, bonds and other securities. 

4. Figure out the net cash flow from investing activities. 

5. Add all the three columns together, then add the balance in the operating activities, financing activities, and investing activities columns together. "