MANAGEMENT

Detailed explanation-1: -To calculate net cash flow, simply subtract the total cash outflow by the total cash inflow. Balancing cash inflow and outflow is vital to maintaining a healthy business.

Detailed explanation-2: -The formula for operating cash flow is: Operating cash flow = operating income + non-cash expenses – taxes + changes in working capital The restaurant’s operating cash flow therefore equals $20, 000 + $1, 500 – $4, 000 – $6, 000, giving it a positive operating cash flow of $11, 500.

Detailed explanation-3: -Cash inflow is the money going into a business which could be from sales, investments or financing. It’s the opposite of cash outflow, which is the money leaving the business. A company’s ability to create value for shareholders is determined by its ability to generate positive cash flows.

Detailed explanation-4: -Net cash flow is a profitability metric that represents the amount of money produced or lost by a business during a given period. Usually, you can calculate net cash flow by working out the difference between your business’s cash inflows and cash outflows.

Detailed explanation-5: -Cash inflow is the cash you’re bringing into your business, while cash outflow is the money that’s being distributed by your business. While distinguishing between the two may be simple, there are elements that make cash inflow and outflow different entities in your cash reserve.