Definition

The movement of money in and out of a business, which in most startups flows primarily in the out direction at an alarming velocity. Positive cash flow means more money coming in than going out, a concept that seems simple until you try to actually achieve it.

Example Usage

"Our cash flow is technically positive if you don't count expenses. Unfortunately, our accountant insists on counting expenses."

Related Terms

Beginner

taxes

Money extracted by the government in exchange for services you'll never see itemized on a receipt. Unlike paying for a latte, you don't get to choose the size, flavor, or whether you want it at all. The financial relationship status between you and your government: it's complicated, and it's definitely not negotiable.

💰 Finance / Accounting
Beginner

matching principle

The accounting concept that expenses should be recorded in the same period as the revenues they helped generate, because timing matters. It's why you can't expense the entire marketing budget in January even though that's when you paid for it.

💰 Finance / Accounting
Advanced

stuffing the channel

Forcing distributors to buy more inventory than they can sell to inflate current sales figures, essentially borrowing from future sales to make today look better. It's corporate kicking-the-can-down-the-road at its finest.

💰 Finance / Accounting
Advanced

adverse opinion

The auditing equivalent of a failing grade, where auditors formally declare that financial statements are materially misstated and unreliable. It's the corporate kiss of death that sends investors running for the exits.

💰 Finance / Accounting
Beginner

audit

The financial equivalent of a surprise inspection where someone with a calculator and a suspicious mind examines your records to ensure you're not committing creative accounting. It's an independent review of financial statements, controls, and compliance that either confirms everything's fine or ruins everyone's year. The word alone can make CFOs break into a cold sweat.

💰 Finance / Accounting
Intermediate

Enterprise Value

A company's total value including debt and excluding cash, representing what you'd pay to own it outright and settle all obligations. It's market cap's more sophisticated cousin that actually understands capital structure.

💰 Finance / Accounting

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