Just call us Bond. Amortized bond.
Over 700 finance terms, Shmooped to perfection.
This is a really cool term thrown around by financial analysts and bean counters hither and yon to refer to profits, but in the Old School definition. Meaning, how much actual cold, hard lucre is your business generating.
When your great grandparents ran their grocery store, at the start of the day there was likely something like $114.52 cents in a big fat cigar box with a lock on it. Then they sold lettuce. And Ipecac. And dead cow parts. They also bought pasta from the pasta purveyor who happened by. And paid the rent collector when he knocked. And they paid their help the day wages due. And so on. And at the end of that day, there was $122.68 in the cigar box. They had cash flow over that period of $8.16. And in those days, that bought a small house.
In fancier parlance, cash flow has a few other tags. Some quick and very dirty accounting, giggity. Bob.com streams his life from a webcam at his bed. People pay to watch. Bob buys a computer for $3,600. By law, he must depreciate" the value of the computer by $100 per month. By law, computers are worth zip at the end of 3 years. Yet Bob's computer will last way more than 3 years. While Bob shows a loss of $100 each month for computer amortization, he's not really losing $100. In fact, his computer is likely to last 72 months in which case he has "over-amortized" the computer costs by 50 bucks a month - on his income statement he'll show $50 less in real cash profits - or cash flow (wink- wink) - than he has in reported earnings.