The actual money entering and leaving the business each period. Different from accounting profit: you can have earnings and run out of cash.
↳ Analogía
A company can be profitable on paper but go bankrupt if it has no cash to pay wages. Cash flow shows reality.
Ejemplo numérico
Positive and growing flow: the business self-finances. Negative flow in interim years: you need reserves or financing. Always negative: rethink the model.
Year 0: −$100,000 (CAPEX). Years 1 to 5: +$25,000, +$30,000, +$35,000, +$40,000, +$45,000. That series feeds NPV and IRR directly.