Want to instantly gauge a business's financial health? Check out its cash flow. If there's a steady stream of incoming cash, excellent—you're on the road to small-business success. If not, buckle up: you're in for a bumpy ride.
Okay, measuring a business's health isn't quite as simple as checking cash flow alone. Profit, loss, equity, and, of course, a solid idea and ready audience all play a part in how long a business lasts. But cash flow, or the movement of cash into and out of a business, nabs the starring role in a business's success (or failure) every time. After all, without a constant influx of cash, no business can stay afloat, no matter how solid its starting idea or willing its market.
Want more info on how cash flow can make or break your business? Keep reading—we explain cash flow's definition, where cash comes from, and the importance of the cash flow statement in maintaining a healthy business.