![Kazim Qasim - Intrepreting Cashflow](https://www.taxconnections.com/taxblog/wp-content/uploads/Kazim-Qasim-Intrepreting-Cashflow.jpg?resize=90%2C90&ssl=1)
Just because there’s a positive balance in your checking account doesn’t mean that your business is making money. Checks that you’ve written for expenses may not have cleared yet, or customers could have paid in advance. Relying on a positive balance to determine if your business is solvent could be dangerous.
Cashflow represents the movement of cash in and out of your business. Cashflow management seeks to match the inflows and outflows so that you’re never short-handed, though sometimes business owners must borrow to cover gaps.
Learning more about the ups and downs of how cash flows in and out of your business will help you make better strategic and borrowing decisions. The past can inform the future when forecasting cashflow. But before you get into analyzing a cashflow statement, you must understand it.
Sections of the Cashflow Statement
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