Explain the Cash Flow Generation Process

question 20

Essay

Explain the cash flow generation process.

---

Definitions:

Accounting Break-even

The moment when the sum of all costs equals the total revenue, which means there is no net gain or loss.

Operating Cash Flow

Cash generated by a company’s normal business operations.

Fixed Costs

Fixed outgoings that are unaffected by production or sales volumes, such as renting costs, salary payments, and insurance expenses.

Depreciation

The systematic allocation of the cost of a tangible asset over its useful life, reflecting its consumption, wear and tear, or obsolescence.