Cash flow refers to the net amount of cash and cash equivalents being transferred into and out of a business, particularly focusing on how much liquid capital is available at any given time. It is a component of [[operating capital]], which encompasses all financial resources that a company uses to maintain its day-to-day operations. For startups, managing cash flow effectively is important because it ensures that they have enough liquidity to cover operational expenses, invest in growth opportunities, and navigate unforeseen financial challenges.