Positive cash flow occurs when your business brings in more money than it spends during a specific period. In other words, your cash inflow (from sales, investments, loans, etc.) exceeds your cash outflow (expenses, debt payments, etc.). Positive cash flow is a sign of financial health, allowing you to cover costs, invest in growth, and build reserves.Negative cash flow, on the other hand, happens when your expenses surpass your income. In this scenario, your business is spending more than it's earning within a given timeframe. It can be a red flag, indicating potential financial trouble, as it may lead to difficulties paying bills, debts, or even meeting day-to-day operational needs.