The Cash Flow calculator computes the difference between one's income and one's expenses.
INSTRUCTIONS: Choose your preferred currency (e.g. Brazilian Real) and enter the following:
Cash Flow (CF): The calculator returns the cash flow in U.S. dollars. This can be automatically converted to other currency units (e.g. Indian Rupee) via the pull-down menu.
The Cash Flow formula calculates the difference between one's total income from all sources and total expenses. Note, the period for both factors must be the same (e.g. monthly wages and monthly bills). The Cash Flow formula constitutes the basic premise of liquidity over a period of time. Insolvency occurs when a cumulative negative cash flow eliminates cash reserves. When cash flow is negative, you need to either increase income to meet expenses, or decrease expenses to meet income.