Editing Cash flow (section)

{{Short description|Movement of money into or out of a business, project, or financial product}}
{{Other uses}}
{{accounting}}
'''Cash flow''', in general, refers to payments made into or out of a business, project, or financial product.<ref>{{Cite book |last1=Koller |first1=Tim |title=Valuation: measuring and managing the value of companies |last2=Goedhart |first2=Marc |last3=Wessels |first3=David |date=2015 |publisher=Wiley |others=McKinsey & Company |isbn=978-1-118-87370-0 |edition=Sixth University |location=Hoboken, NJ}}</ref> It can also refer more specifically to a real or virtual movement of [[cash|money]].
*Cash flow, in its narrow sense, is a [[payment]] (in a [[currency]]), especially from one [[central bank]] account to another. The term 'cash flow' is mostly used to describe payments that are expected to happen in the future, are thus uncertain, and therefore need to be [[Cash flow forecasting|forecast]] with cash flows.
*A cash flow {{math|(CF)}} is determined by its time {{mvar|t}}, [[Real versus nominal value (economics)|nominal amount]] {{mvar|N}}, currency {{math|CCY}}, and account {{math|A}}; symbolically, {{math|1=CF = CF(''t'', ''N'', CCY, A)}}.

Cash flows are narrowly interconnected with the concepts of [[Value (economics)|value]], interest rate, and [[liquidity]]. A cash flow that shall happen on a future day {{mvar|t<sub>N</sub>}} can be transformed into a cash flow of the same value in {{math|''t''<sub>0</sub>}}. This transformation process is known as [[discounting]], and it takes into account the [[time value of money]] by adjusting the nominal amount of the cash flow based on the prevailing [[interest rate]]s at the time.