Cash flow is an important financial metric that businesses use to assess the performance of their operations. It’s a measure of how much money comes in and goes out of a business over a given period of time. The four main components of cash flow are operating, investing, financing and operating activities:

Operating activities refer to transactions that directly generate income or affect expenses, such as selling goods or services, buying inventory or paying bills. Investing activities involve the purchase and sale of assets, such as property, plants, equipment and securities. Financing activities involve working with banks and other creditors to obtain loans, issue bonds and receive dividends.

By understanding these components, business managers and owners can ensure they’re generating enough cash flow to pay their bills, invest in future growth and secure necessary financing when needed.