Recently a business owner was asked directly by the buyer of the business for a current year cash flow. The seller produced a cash flow and gave it to the buyer. The buyer was elated as it showed more cash flow than the profit and loss statement demonstrated.
Unfortunately the business owner did not know about this particular form of cash flow and the buyer was misleading himself. The term cash flow means many different things. Utilizing cash flows can help a business person understand and manage their business.
This link will lead you to a white paper describing some uses, the confusion, and the potential threat of misunderstanding.
Readers, Please lend your own expertise, experiences, and insights.
