What is net cashflow?

Definition of net cashflow

Net cashflow is the difference between a business’s cash inflow and cash outflow over a period of time. Net cashflow is an important indicator of the health of a business.

Net cashflow formula   

You can calculate net cashflow for a time period (for example, a year) by subtracting cash outflow from cash inflow.  

Cash inflow for the year – cash outflow for the year = net cashflow for the year

For example, if a business had cash inflow of £80,000 in 2022 and cash outflow of £45,000 in 2022, its net cashflow for 2022 would be £35,000 (£80,000 - £45,000 = £35,000).

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