What is cash inflow?
Cash inflow is the money going into a business. That could be from sales, investments or financing. It's the opposite of cash outflow, which is the money leaving the business. A business is considered healthy if its cash inflow is greater than its cash outflow.
Where have you heard about cash inflow?
You will have most likely heard about cash inflow when deciding whether to invest in a company. If a company ends up with a lower cash inflow than cash inflow it may eventually become bankrupt. By looking at a company's cash inflow compared to its outflow, you can balance up whether the risk of investing is worth any potential gains.
What you need to know about cash inflow.
One way to look the health of a company is to look at its cashflow statement, otherwise known as a CFS. A CFS shows you what money is coming into the company from all its various sources. It also helps you to see the long-term trends of what and how the company makes and spends its money.
It's important to remember that a company's past performance should not be held as an indicator of future success. The cost of your investments can go up as well as down.
Find out more about cash inflow.
As well as cash inflow and cash outflow, there's also cashflow, which is the combination of both.