reiðufjárstreymis

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, organization, or individual's financial situation over a specific period. Understanding cash flow is crucial for financial health and sustainability.

Positive cash flow occurs when more money is coming in than going out, indicating that a business is generating sufficient funds to cover its expenses and potentially reinvest or distribute profits. Conversely, negative cash flow means that expenses exceed incoming revenue, which can signal financial difficulties and a need for adjustments.

Key components of cash flow analysis include operating cash flow, which is generated from the normal business operations; investing cash flow, related to the purchase and sale of assets like property or equipment; and financing cash flow, involving activities like borrowing money or issuing stock.

Effective management of reiðufjárstreymi allows for better planning, investment decisions, and the ability to meet financial obligations. It is a vital metric for assessing liquidity and the overall financial performance of an entity.