# Cash Flow

vCalc Reviewed
"cash flow" =
Tags:
Rating
ID
vCalc.Cash Flow
UUID
116e64be-8011-11e4-a9fb-bc764e2038f2

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:

• (i) Income
• (e) Expenses

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 Math / Science

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.