Cash flow refers to the movement of money in and out of a business or individual’s finances over a specific period. It includes all sources of income, such as sales revenue or investments, and all expenses, like rent or salaries. Positive cash flow means more money is coming in than going out, which is essential for maintaining operations and growth. Monitoring cash flow helps in budgeting and financial planning. It allows businesses and individuals to understand their financial health, make informed decisions, and ensure they can meet obligations. Tools like cash flow statements are often used to track these movements effectively.