Fjárflæði

Fjárflæði is an Icelandic term that translates to "money flow" or "cash flow" in English. It refers to the movement of money into and out of a business, project, or economy over a specific period. Understanding fjárflæði is crucial for financial health and decision-making.

In a business context, fjárflæði encompasses all cash inflows, such as revenue from sales, investments, and financing, and cash outflows, such as expenses, debt repayments, and capital expenditures. A positive fjárflæði indicates that more money is coming in than going out, suggesting financial stability and the ability to meet obligations. Conversely, a negative fjárflæði can signal financial distress and potential liquidity problems.

Monitoring fjárflæði allows businesses to manage their working capital effectively, plan for future investments, and assess their overall profitability. It is a key indicator used by investors, lenders, and management to evaluate a company's financial performance and its capacity to generate cash.

On a broader economic level, fjárflæði can refer to the movement of capital between countries or sectors. This can include foreign direct investment, portfolio investments, and remittances. Analyzing national or international fjárflæði helps economists understand economic trends, capital allocation, and potential imbalances.