Positive Cash Flow
When cash inflows exceed outflows in a period.
Positive cash flow means more money flows into the business than out during a given period. This allows the business to pay bills on time, build reserves, invest in growth, and reduce debt. While positive cash flow is the goal, the source matters—cash from operations is sustainable, while cash from selling assets or taking loans is temporary.
Example
A subscription business collects $80,000 from customers and spends $55,000 on operations, generating $25,000 in positive cash flow that it uses to build reserves and invest in marketing.
Why It Matters for Your Business
Positive cash flow gives you options—you can reinvest, save, take distributions, or weather surprises, while negative cash flow limits every decision.
Related Terms
More Cash-flow Terms
Burn Rate
The rate at which a company spends cash monthly.
Cash Flow
The movement of money in and out of a business.
Cash Flow Forecast
A projection of expected cash inflows and outflows.
Cash Flow Statement
A financial statement showing cash movements from operations, investing, and financing.
Free Cash Flow
Cash from operations minus capital expenditures.
Related Financial Guides & Resources
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