--- title: How to Calculate Small Business Cash Flow description: Calculating your cash flow is critical to running a successful small business. image: https://smartbizbank.com/hubfs/Imported_Blog_Media/HowtoCalculateSmallBusinessCashFlow-2-1-2.jpg --- - [Share](https://smartbizbank.com/blog/how-to-calculate-small-business-cash-flow#) - - - - [mailto:?subject=Check%20out%20https://smartbizbank.com/blog/how-to-calculate-small-business-cash-flow](mailto:?subject=Check%20out%20https://smartbizbank.com/blog/how-to-calculate-small-business-cash-flow) # How to Calculate Small Business Cash Flow May 25, 2016 By [Suzanne Robertson ](https://smartbizbank.com/blog/author/suzanne-robertson) Unless you’re a financial professional, tracking cash flow can seem like an overwhelming task. However, calculating your cash flow is critical to running a successful small business. [![Apply for an SBA Loan](https://no-cache.hubspot.com/cta/default/21458256/5e044285-671c-49e1-956e-7b71ba93d17a.png)](https://cta-redirect.hubspot.com/cta/redirect/21458256/5e044285-671c-49e1-956e-7b71ba93d17a) To stay on top of finances, your company’s cash flow should be evaluated on a quarterly and monthly basis; weekly or daily evaluation is a smart idea. The description of cash flow is pretty simple: Cash in minus cash out. Investopedia gives a more thorough explanation: **cash flow** is the net amount of cash and cash-equivalents moving into and out of a business. **Positive cash flow** indicates that a company's liquid assets are increasing. With liquid assets, a company can settle debts, reinvest in its business, pay expenses and provide a buffer against future financial challenges. **Negative cash flow** indicates that a company's liquid assets are decreasing. Net cash flow is different from net income. **Net income** includes accounts receivable and other items for which payment has not actually been received. Cash flow is used to assess the quality of a company's income, that is, how liquid it is, which can indicate whether the company is positioned to remain solvent. Having positive cash flow is crucial if applying for a small business loan. Small business owners must have the ability to make required loan payments. Below are six essentials of a cash flow statement: ## 1) Cash Balance Start with your total cash balance at the start of a specific time period ## 2) Operations Operating activities are the main source of the company’s cash, direct and indirect costs associated with selling a product or service. ## 3) Investing Investing is buying and selling assets or securities not related to the inventory and other operations. Examples of long-term assets include property, equipment, investments, stocks and loan payments that have been given or received by the business. ## 4) Finance Financing activities include issuing or purchasing stock or equity, borrowing money, repaying debt and distributing dividend payments. ## 5) New Cash Balance Add positive numbers (inflows) and negative numbers (outflows) of cash under operating, investing and finance activities, and then add those three values together. Subtract the previous statement’s cash balance from current period to determine the net increase in cash and cash equivalents. ## 6) Forecasting A cash flow forecast is considered one of the most critical early warning systems for companies that operate with debt, and should be done on a regular basis. If you need additional help, check out this [Cash Flow Calculator](http://www.bplans.com/business_calculators/cash_flow_calculator/) from **BPlans**. You can use low cost financing to shore up your cash flow. An SBA loan is the best bet for entrepreneurs with low rates, long terms and low monthly payments. Visit [SmartBiz](https://www.smartbizloans.com/?partner_id=smartbiz&promo_code=blog&campaign_id=40030) today and discover in about five minutes if you’re qualified for an SBA loan.   [![See if you pre-qualify](https://no-cache.hubspot.com/cta/default/21458256/11f5b6cf-ca4b-4172-9417-45caf1a3099f.png)](https://cta-redirect.hubspot.com/cta/redirect/21458256/11f5b6cf-ca4b-4172-9417-45caf1a3099f) ![Q3 Promo E1](https://smartbizbank.com/hubfs/Q3%20Promo%20Email%20Images/Q3%20Promo%20E1.png) ### Access Funds Quickly Apply for a Bank Term Loan from a bank in our trusted network [![See if you pre-qualify](https://no-cache.hubspot.com/cta/default/21458256/08df270b-4561-4437-a5aa-11d47ef08efb.png)](https://cta-redirect.hubspot.com/cta/redirect/21458256/08df270b-4561-4437-a5aa-11d47ef08efb) - [Follow SmartBiz](https://smartbizbank.com/blog/how-to-calculate-small-business-cash-flow#) - - - - - ### Access to the right loan for right now We’re connecting small businesses with SBA, bank term loans, lines of credit, and flexible financing options. [![See if you pre-qualify](https://no-cache.hubspot.com/cta/default/21458256/08df270b-4561-4437-a5aa-11d47ef08efb.png)](https://cta-redirect.hubspot.com/cta/redirect/21458256/08df270b-4561-4437-a5aa-11d47ef08efb) ##### Topic - [Business Loans](https://smartbizloans.com/blog/tag/business-loans) - [Business Stories](https://smartbizloans.com/blog/tag/business-stories) - [Marketing](https://smartbizloans.com/blog/tag/marketing) - [Money Management](https://smartbizloans.com/blog/tag/money-management) - [Operations](https://smartbizloans.com/blog/tag/operations) ## Related Posts [ See all blog posts ](https://smartbizbank.com/blog) [Money Management July 01, 2026 ## How to Reforecast Your Budget Based on Summer Trends When you built your company’s budget for this year, you no doubt looked at past data. However, there were probably also some future projections that... Read More ](https://smartbizbank.com/blog/reforecast-your-budget-with-summer-trends-smartbiz-bank) [Money Management June 24, 2026 ## The Counterintuitive Truth About Summer Slowdowns For many small business owners, summer is an uncomfortable time of year. Many consumers travel or spend more time at home, which typically leads to them making fewer... Read More ](https://smartbizbank.com/blog/do-less-this-summer-to-grow-your-business-smartbiz-bank) [Money Management June 22, 2026 ## Small Business Revenue: Determine Where You Stand As a business owner, regularly reviewing your annual revenue gives you a clear picture of your company’s current health and helps you evolve your business strategically so... Read More ](https://smartbizbank.com/blog/small-business-revenue-determine-where-you-stand) ### Smart growth is smart business ## Access to the right loan for right now See if you pre-qualify, without impacting your credit score. 1 [ Apply Now ](https://smartbizbank.com/apply) 1. We conduct a soft credit pull that will not affect your credit score. However, in processing your loan application, SmartBiz Bank and the lenders with whom we work will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may impact your credit score. The SmartBiz® Small Business Blog and other related communications from SmartBiz BankSM are intended to provide general information on relevant topics for managing small businesses. Be aware that this is not a comprehensive analysis of the subject matter covered and is not intended to provide specific recommendations to you or your business with respect to the matters addressed. 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