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Cash Flow Systems Cheat Sheet

The core ideas of Cash Flow Systems distilled into a single, scannable reference — perfect for review or quick lookup.

PiqCue — piqcue.com/cash-flow-systems/cheatsheet

Quick Reference

Cash Flow

The movement of money into (inflows) and out of (outflows) a business or personal account over a specific period, representing actual liquidity rather than accounting profit.

Operating Cash Flow

Cash generated or consumed by a company's core business activities such as selling goods, paying employees, and covering operating expenses.

Investing Cash Flow

Cash spent on or received from long-term assets like equipment, property, or investments in other companies.

Financing Cash Flow

Cash movement related to funding the business -- issuing stock, borrowing or repaying loans, and paying dividends to shareholders.

Free Cash Flow

The cash remaining after a company covers operating expenses and capital expenditures, representing money available for expansion, debt repayment, or distributions.

Cash Flow Statement

A financial report that summarizes all cash inflows and outflows during a specific period, organized into operating, investing, and financing sections. It bridges the gap between the income statement and the actual cash position shown on the balance sheet.

Cash Conversion Cycle

The number of days it takes a company to convert its investment in inventory and other resources into cash from sales. Calculated as days inventory outstanding plus days sales outstanding minus days payable outstanding. A shorter cycle means faster cash recovery.

Burn Rate

The rate at which a company spends its cash reserves. Gross burn rate is total monthly cash spending; net burn rate subtracts incoming revenue. Burn rate determines a company runway, or how many months it can survive before needing additional funding.

Key Terms at a Glance

Operating Cash Flow:Cash generated from core business activities such as selling goods, paying suppliers, and compensating employees.
Investing Cash Flow:Cash used for or generated from buying and selling long-term assets like property, equipment, or investments.
Financing Cash Flow:Cash flowing between the company and its capital providers, including stock issuance, borrowing, debt repayment, and dividends.
Free Cash Flow:Operating cash flow minus capital expenditures; the cash available for distribution or reinvestment.
Cash Conversion Cycle:Days between paying for inventory and collecting cash from sales, calculated as DIO + DSO - DPO.
Burn Rate:The monthly rate at which a company spends its cash reserves. Net burn rate subtracts revenue from total spending.
Runway:Months a company can operate at its current burn rate before running out of cash.
Working Capital:Current assets minus current liabilities; a measure of short-term liquidity.
Accounts Receivable:Money owed by customers who received goods or services but have not yet paid.
Capital Expenditures (CapEx):Funds spent to acquire, upgrade, or maintain long-term physical assets.
Accrual Accounting:Records revenue when earned and expenses when incurred, regardless of when cash changes hands.
Depreciation:A non-cash expense allocating the cost of a tangible asset over its useful life.
Indirect Method:Calculates operating cash flow by starting with net income and adjusting for non-cash items and working capital changes.

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Cash Flow Systems Cheat Sheet - Quick Reference Guide | PiqCue