Cash flow refers to the movement of money in and out of a business or individual’s finances. It includes all the income received, such as sales revenue or salary, and all the expenses paid, like rent or bills. Positive cash flow means more money is coming in than going out, which is essential for maintaining financial health and supporting growth. Monitoring cash flow helps ensure that there is enough liquidity to cover obligations. For example, a small business needs to track its cash flow to pay employees and suppliers on time. Understanding cash flow can also aid in making informed decisions about investments and savings.