Investment Cash Flow Calculator

Cash Flow Formula:

\[ \text{Cash Flow} = \text{Inflows} - \text{Outflows} \]

Cash Flow:

Unit Converter ▲

Unit Converter ▼

From:	To:

1. What is Investment Cash Flow?

Investment Cash Flow represents the net amount of cash being transferred into and out of an investment. It's calculated as the difference between cash inflows (money received) and cash outflows (money spent).

2. How Does the Calculator Work?

The calculator uses the basic cash flow formula:

\[ \text{Cash Flow} = \text{Inflows} - \text{Outflows} \]

Where:

\( \text{Inflows} \) — All cash received from the investment (dividends, interest, sales proceeds, etc.)
\( \text{Outflows} \) — All cash spent on the investment (purchase price, fees, maintenance costs, etc.)

Explanation: Positive cash flow indicates more money coming in than going out, while negative cash flow means more money is being spent than received.

3. Importance of Cash Flow Calculation

Details: Calculating cash flow helps investors assess the profitability and viability of an investment, make informed decisions, and compare different investment opportunities.

4. Using the Calculator

Tips: Enter all cash inflows and outflows in dollars. Both values must be positive numbers. The calculator will compute the net cash flow.

5. Frequently Asked Questions (FAQ)

Q1: What counts as an inflow in investment cash flow?
A: Common inflows include dividends, interest payments, capital gains from sales, rental income, and any other cash returns from the investment.

Q2: What counts as an outflow in investment cash flow?
A: Common outflows include initial purchase price, brokerage fees, maintenance costs, taxes, insurance, and any other expenses related to the investment.

Q3: How is cash flow different from profit?
A: Cash flow measures actual money movement, while profit is an accounting concept that may include non-cash items like depreciation.

Q4: Why is cash flow important for investors?
A: Positive cash flow indicates an investment is generating returns, while negative cash flow may require additional capital to maintain.

Q5: Should I consider time value of money in cash flow calculations?
A: For more precise analysis, consider using discounted cash flow (DCF) which accounts for the time value of money.