2 min read
Definition
Positive cash flow means more money came into a business than went out over a period, so the cash balance grew. It is the healthy state, but it is not the same as profit — a business can have positive cash flow in a loss-making period, or negative cash flow while profitable.
In plain terms
Sustained positive cash flow builds the buffer that protects a business from shocks and funds its growth from within. A single positive month is good; a consistent trend is what real financial health looks like.
Why it matters
Positive cash flow is the goal of every cash-management discipline. See negative cash flow for the opposite, and cash flow management.
Related reading
Negative cash flow
Negative cash flow means more money left a business than came in over a period, so the cash balance shrank.
Read →Net cash flow
The difference between all cash coming into and going out of a business over a period — positive means the…
Read →
Cash position
A business's cash position is the amount of cash and readily available funds it holds at a given moment — its…
Read →
Cash flow
Cash flow is the movement of money into and out of your business over a period — and whether you have enough…
Read →Funding for UK limited companies
Credicorp lends to your company, not to you personally — short-term working capital with no personal guarantee. See what your business could access.