What term refers to the money currently available in a business to pay salaries, expenses, dividends, and to purchase equipment?

• A. Break-Even Analysis
• B. Enterprise
• C. Cash Flow
• D. Net Worth

Answer: (C)

Cash flow is the money currently available in a business to pay salaries, expenses, dividends, and to purchase equipment. It shows liquidity—the ability to meet day-to-day obligations and to invest when opportunities arise. In simple terms, cash flow tracks actual cash coming in and going out, and what remains to fund operations and investments. A business can be profitable on paper yet struggle if cash flow is tight, because profits don’t always equal cash that’s immediately available. The other terms don’t describe the funds you can use right now: break-even analysis is about the sales level needed to cover costs, an enterprise is the business itself, and net worth is the value of assets minus liabilities, not the day-to-day cash available.