Since cash is the most liquid asset

Since cash is the most liquid asset, most short-term debt needs to be repaid in cash. Therefore, the amount of cash inflow and outflow will directly affect the liquidity and short-term solvency of the enterprise. Cash flow includes cash flow from operating activities, investment activities and financing activities [7]. The so-called cash flow brought by business activities refers to the cash flow brought by the daily production and business activities of an enterprise, such as the cash inflow and outflow brought by purchasing activities, production activities and sales activities. The so-called cash flow of investment activities refers to the long-term internal or external business cash flow, such as the cash inflow or outflow of buying or selling fixed assets, buying or selling long-term securities. The so-called cash flow brought about by financing activities refers to the cash flow brought about by financing and repaying funds, such as borrowing and repaying loans, issuing stocks and claims, paying dividends and interests, etc. The difference between cash inflow and outflow is called net cash flow.