Cash Activity is the amount of cash and cash equivalents entering or exiting a business. It refers to cash inflows such as income from sales, subsidies, or other sources and outflows such as payments for goods and services, debt repayment, taxes, dividends, or other expenses. Cash Activity helps a business understand how efficiently it is managing its cash flow, as well as how well it is able to generate and keep more money. Additionally, it can give insight into possible areas of financial distress. Understanding Cash Activity is key to making sound business decisions and maintaining an effective financial strategy.