Net cash flow represents the net of cash generated by an asset, group of assets, or business enterprise over a period. The term cash flow may represent different levels and arises from operating, investing, and financing activities. Cash flow analysis is used to measure how financially healthy a business is. Firms with strong long-term cash flows are financially healthy and can meet their short-term financial obligations whilst those with weak long-term cash flows may have to liquidate assets to fulfil their short-term financial obligations or seek short-term borrowing such as bank overdraft. Sustained long-term low or negative cash flows are a signal of weak financial capacity which may result in bankruptcy. In business valuation analytics, net cash flows are key components and drivers of value and small changes in net cash flows can have a significant impact on the fair market value of a business when the cash flow method of business valuation is applied. Business valuators, therefore, pay careful attention to net cash flows when conducting due diligence and assessment of the past and future financial performance of the business being valued. The net cash flow is computed as:
  Net Cash Flow =
Net Cash Flow from Operating Activities 
+ Net Cash Flow from Investing Activities
 + Net Cash Flow from Financing Activities
Where:
Net cash flow from operating activities – Measures the net cash inflows and outflows from the core business operation such as sales, direct cost, general and administrative expenses and working capital. Net cash flow from investing activities – Measures the net cash flow from investing activities such as the purchase of assets (property, plant and equipment, vehicles, shares, debt) as well as proceeds from the sale of assets, disposal of shares/debt, and redemption of investments. Net cash flow from financing activities – Measures the net inflow of cash from the financing activities of the company like change in capital from the issuance of securities such as equity share, preference shares, issuing debt, debentures and from the redemption of securities or repayment of a long term or short-term debt, payment of dividend or interest on securities.