Annotating Cashflow

Cashflow is the first derivative (rate of change) of financial capital. Tracking trends in cashflow and especially how they relate to the business cycle and sales cycle is a major factor in business valuation and tends to determine revenue multiples/ capitalization.

Accountants model cashflow in a number of ways:

a cashflow forecast [1] attempts to predict "whether the sales or income you forecast will cover the costs of operation. They also allow you to analyze whether a project will be sufficiently profitable to justify the effort put into it."
the time value of money [2] and related analytics like DCF (used to model cashflow in stable businesses with stable competition, often used by MBAs to assess share values and by venture capitalists in bargaining down entrepreneurs convinced of a generally higher value for shares
the BCG growth-share matrix [3] which attempts to identify cash-rich opportunities, so-called cash cow business, that will decline over time, vs. others that have poor cashflow now but great growth potential
relatively in competitor analysis [4], to determine which of several competitors could outlast the other in a bidding war, market capture or legal conflict