netcashflows
Net cash flows refer to the net inflow or outflow of cash in a business during a specified period. They are calculated by subtracting total cash outflows from total cash inflows and provide a clear picture of a company’s liquidity and financial health. The cash flow statement, a core component of financial reporting, divides net cash flows into three primary sections: operating activities, investing activities, and financing activities. Operating cash flows reflect cash generated or used by core business operations, including revenue receipts and payments for operating expenses. Investing cash flows capture the purchase or sale of long‑term assets such as property, plant, and equipment, as well as investments in securities. Financing cash flows cover cash received from or paid to investors and creditors, including issuance or repayment of debt and equity, and dividend distributions.
Net cash flows are essential for analysts, investors, and managers because they reveal how a company funds