Cash flow sign convention

Cash flow sign convention is a way of looking at financial transactions (like money going in and/or out of a company) and classifying them in positive or negative terms. Positive terms mean money coming in and negative terms mean money going out. For example, if a company sells a product and earns money when it does, that would be considered a positive cash flow. On the other hand, if a company has to spend money to buy something, then that would be a negative cash flow.