What is cash flow in SAP IM - Investment Management?

SAP Term: cash flow

• Component: IM

• Component Name: Investment Management

• Description: The record of movements in funds, showing the net cash income generated for a certain period, with an effect on revenue. In the context of capital investments, cash flow is the difference between incoming over outgoing payments related to the investment expected for each period. It is therefore a criterion during the pre-investment analysis of a capital investment.

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• Key Concepts: 
  Cash flow is a term used in Investment Management (IM) to refer to the movement of money into and out of an investment. It is used to measure the performance of an investment over time, and can be used to determine the return on investment (ROI). Cash flow can also be used to assess the liquidity of an investment, as well as its risk profile. 
  
  How to use it: 
  Cash flow can be used to measure the performance of an investment over time. It is calculated by subtracting the total amount of money invested from the total amount of money received from the investment. This calculation will give you the net cash flow for the period. The net cash flow can then be used to calculate the return on investment (ROI). 
  
  Tips & Tricks: 
  When calculating cash flow, it is important to consider all sources of income and expenses associated with the investment. This includes any fees or taxes that may be associated with the investment. Additionally, it is important to consider any changes in market conditions that may affect the performance of the investment over time. 
  
  Related Information: 
  Cash flow is closely related to other financial concepts such as liquidity, risk, and return on investment (ROI). It is also closely related to other concepts such as budgeting and financial planning. Understanding how cash flow works can help investors make better decisions about their investments.