What is net cash flow?

• A. Opening balance plus net cash flow
• B. Net cash flow equals gross profit
• C. Total cash inflow minus total cash outflow
• D. Closing balance minus opening balance

Answer: (C)

Net cash flow is the net amount of cash moving in and out of a business during a period. It is calculated by subtracting total cash outflows from total cash inflows. A positive result means more cash came in than went out, while a negative result means cash outflows exceeded inflows. This focuses on actual cash movements, not profits. The direct description that matches net cash flow is inflows minus outflows. (Note that ending cash balance equals opening balance plus net cash flow, but the core definition is the difference between inflows and outflows.)