GLOSSARY

Running a Profitable Business: Understanding Cash Flow

With Jim Stice and Kay Stice

Use these terms and definitions below to understand concepts taught in the course.

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Term Definition

cash flow Actual receipt or expenditure of cash, and not a promise of a receipt or
expenditure of cash, from a business activity

depreciation An accounting deduction made for a loss of a capital asset’s value over
time

expense Economic value consumed by a company in its business operations

free cash flow Operating cash minus investing cash is the cash left over after capital
expenditures have been paid

net income The measure of a business’s economic performance, calculated as

revenue minus expense

revenue Economic value created for customers that translates into customers
paying for a product or service

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