What is the result of deducting a business's payments from its receipts?

The result of deducting a business's payments from its receipts is referred to as Net Cash Flow. This financial metric measures the difference between the cash coming into the business (receipts) and the cash going out (payments) over a specific period. A positive net cash flow indicates that the business is bringing in more cash than it is spending, which is essential for maintaining operations, paying bills, and investing in growth. Conversely, a negative net cash flow suggests that the business is spending more than it makes, which can lead to financial difficulties if not addressed.

In this context, other terms provided refer to different financial concepts: Closing Balance relates to the amount of cash available at the end of a particular period after accounting for net cash flow; Insolvency indicates a state where a business cannot pay its debts, typically due to persistent negative cash flow; Trade Credit refers to an arrangement where a buyer can purchase goods or services and defer payment until a later date. Each of these concepts plays a role in business finance but does not directly result from the calculation of cash flow.