GCSE Business Practice Exam 2025 – Complete Study Resource

Net cash flow refers to the difference between the total cash inflows and total cash outflows of a business over a specific period. The correct description emphasizes that net cash flow is calculated by subtracting total payments (outflows) from total receipts (inflows). This figure is crucial for understanding the liquidity and financial health of a business, as it indicates whether the company is generating more cash than it is spending.

In contrast, total inflow only captures the money coming into the business, and total outflow focuses solely on the money going out, without providing a complete picture of cash movements. Projected cash movement refers to anticipated cash flows in the future, which does not reflect the actual net cash flow that has occurred in the past or present. Therefore, the description of net cash flow as "receipts minus payments" clearly captures its essence and highlights the importance of evaluating both sides of cash movement to understand a business's financial position.