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Cash Flow Cash Flows Cash is the most liquid of all the assets of a business - it represents the bank balance and the cash that the business has available on the premises (otherwise known as 'petty cash'). Cash flow refers to the difference between the cash flowing into the business (e.g. through sales revenue) and the cash flowing out of the business (e.g. bills and wages). Cashflow problems Having a positive cash flow is vital for the survival of a business, since without the ability to pay workers and suppliers then the business will soon have to cease trading. This potential problem is compounded by the fact that businesses often have to pay many expenses several weeks or even months before any cash actually flows into the business. For example, wages and salaries will have to be paid to employees, suppliers will have to be paid for any raw materials, and the...

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