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).