Cash flow refers to the movement of capital into and out of a business, project, or investment vehicle over a defined period. It tracks the actual liquidity generated and used—distinct from accounting profits—and provides a real-time view of an entity’s ability to meet its obligations, reinvest, or distribute returns.

In private market funds, cash flow analysis is essential for assessing the timing and magnitude of capital commitments, capital calls, investment deployments, and distributions to Limited Partners (LPs). It is also a core input for performance metrics like the Internal Rate of Return (IRR) and Multiple on Invested Capital (MOIC).