Financial Management

1. Cash Flow:

• What it means: The movement of money into and out of a business.
• In simple terms: It shows how much money is coming in (inflows) and going out (outflows) of a company over a certain period.
• Example: If a business receives ₹1,00,000 from sales and pays ₹50,000 for expenses in a month, the cash flow is ₹50,000 (₹1,00,000 inflow - ₹50,000 outflow).

• What it means: The money that comes into the business from various sources.
• In simple terms: It's the income or revenue a business earns.
• Example: Sales revenue, income from investments, loans, or any other money received by the business.

• What it means: The money that the business spends or pays out.
• In simple terms: It's the money going out of the business for expenses.
• Example: Paying for rent, salaries, materials, or utility bills.

• What it means: A certain amount of extra stock or inventory kept in reserve to avoid running out.
• In simple terms: It’s a safety stock kept to ensure there are enough goods even if demand increases unexpectedly or there are delays in supply.
• Example: A store might keep extra supplies of essential items to avoid shortages during busy seasons.

• What it means: This term seems to be a misunderstanding or a typo. It could refer to "gestation period" or "grace period".
  • Gestation Period: The time between starting a project and when it begins generating revenue or returns.
  • Grace Period: A period during which no penalty or payment is required, often used in loans.
• In simple terms (Grace Period): It's a period of time after a payment is due, during which you can still make the payment without incurring penalties.
• Example: If a loan payment is due on the 1st of the month but you have a grace period of 10 days, you can make the payment by the 10th without late fees.