There are three types of cash flow that are important for businesses to understand: operating, investing, and financing.
Operating cash flow refers to the money that comes in and out of the business from day-to-day operations, such as revenue and expenses. Investing cash flow involves money used for purchasing assets like equipment or investments. Financing cash flow refers to money used for debt repayment, issuing stocks, or paying dividends. It’s essential to monitor all three types of cash flow to understand the financial health of the business.