Cash flow is the difference between the amount a firm receives in cash in a given period and the amount it spends in cash over the same period.

It can be measured in a number of ways. Free cash flow for example is a firm’s operating cash flow after certain non-discretionary cash flows, such as bank interest, tax and the amount needed to maintain fixed assets, have been deducted. Cash flow is different to profit in that it is based only on cash received and paid during a specified period rather than revenue earned or expenses incurred.