Cash Flow from Investments

What is Cash Flow from Investments?

Cash flow from investments can be used to understand the money your business has earned from or spent on real estate, stock and other investment opportunities. Here’s how you can determine your cash flow from investments:

Cash flow from investments = amount generated from asset sales/cost of purchasing assets

While a negative result from this formula can appear concerning, it may not be cause for alarm. This is just one part of a company’s overall cash flow, and negative cash flow from investments – especially when part of a well-considered business strategy – can correlate with a positive overall trajectory.

Related terms

30-Day and 13-Week Operating Cash Burn

30-day and 13-week operating cash burn are also known as the “burn rate.” These are the rates at which a business consumes its cash reserves when it isn’t bringing in profit.

Account Reconciliation

Account reconciliation is the process of comparing two sets of records to ensure their accuracy and consistency.

Accounts Payable

Accounts payable (AP) refers to the amount of money that a business owes to its suppliers or creditors for goods or services purchased on credit.

Accounts Payable Days

Accounts Payable Days (AP Days), also referred to as Days Payable Outstanding (DPO), is a financial ratio that measures the average time a company takes to pay its suppliers or vendors for credit purchases.

Accounts Payable Turnover

Accounts payable turnover explains how many times a business pays its creditors in a set timespan. Companies can use this metric to measure their short-term liquidity.

Accounts Receivable Turnover

The accounts receivable turnover ratio (or debtor turnover ratio) allows businesses to evaluate their debt collection efficiency.