A tool that allows one to project the movement of money into and out of a business or investment over a defined period. For example, an investor might use this to estimate returns from a rental property by forecasting rental income and subtracting projected expenses like maintenance and property taxes.
Such estimations are critical for financial planning and decision-making. They provide insights into potential profitability, liquidity, and long-term viability. Early iterations were often manual spreadsheets, but software solutions have streamlined the process and increased accuracy by incorporating more complex modeling capabilities.
