Reiðufjárstreymi

Reiðufjárstreymi is an Icelandic term that translates to "cash flow" or "money flow" in English. It refers to the movement of money into and out of a business, project, or individual's finances over a specific period. Understanding reiðufjárstreymi is crucial for financial management and decision-making.

Positive reiðufjárstreymi occurs when more money is coming in than going out. This indicates a healthy financial situation, where a business or individual has sufficient funds to cover expenses, reinvest, or save. Conversely, negative reiðufjárstreymi happens when outflows exceed inflows, potentially leading to financial difficulties if not managed.

Analyzing reiðufjárstreymi involves tracking income sources and expenditure categories. This can be done through various accounting methods and financial statements, such as the cash flow statement. It provides insights into liquidity, solvency, and the overall financial health of an entity. Effective management of reiðufjárstreymi is essential for sustainability and growth. Businesses use this analysis to forecast future financial needs, identify potential shortfalls, and plan for investments. For individuals, it helps in budgeting and achieving financial goals.