How is "cash flow" defined?

The definition of "cash flow" is accurately captured by the measure of received and spent money. This term represents the movement of cash in and out of an individual’s or organization’s finances over a specific period. A positive cash flow indicates that more money is coming in than going out, which is essential for maintaining operations and funding growth. Conversely, negative cash flow suggests that the individual or organization is spending more than it is earning, which can lead to financial difficulties.

Other options do not fully encompass the concept of cash flow. For instance, the total cash owned refers only to the amount of cash available at a given time, without considering cash inflows and outflows over time. The remaining balance in an account is a snapshot of funds available but lacks any perspective on how that balance is affected by cash activities. The projected income for the year speaks to anticipated earnings rather than the actual movement of cash, which is the essence of cash flow. Thus, the measure of received and spent money captures the dynamic aspect of cash flow essential for understanding financial health.