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So economics is all about money coming and going. This process of money coming and going is the flow of cash. In more technical terms Cash Flow is the "movement of money into and out of a business, project, or financial product" which is recorded as receipts of money transfers. For example, the loan payments, depositing money into our bank account, our car maintenance cost, etc are all parts of cash flow. These coming and going are known as Receipts and Disbursements.
The value of cash is different in different times and so one should consider the importance of cash flow over time in a project. To simplify what goes on around a project in terms of receipts and disbursements, Cash Flow Diagrams are used (figure below). Upward arrows show receipts (inflows), and downward arrows show disbursements (outflows).
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Gradient series cash flow starts with an individual cash flow at t = 2 and increases by the gradient (G) each year until t = n. The value of G at t = 1 is 0.
Uniform series cash flow shows equal money transactions (usually Annual Amount (A) over time from t = 1 to t = n). In this format, the first cash flow occurs at t = 1 so that every cash flow in between, for which the year-end convention applies, is counted for. The Year-End Convention assumes that all the coming and going of the money occurs at the end of the year in which they occurred, however, there is a few exceptions in this format which is related only to the very beginning of the project such as the Initial Project Cost or Purchase Cost, Trade-In Allowance, etc.
Single payment cash flow can happen in any time, t = beginning (0), t = end (n), or t = anytime (t0).
A project's cash flow is easier to analyze if represented in standard cash flow formats: Single Payment, Uniform Series, and Gradient Series.
The expenses for the time period before t = 0, is called Sunk Costs, which are only considered in the economic analysis if they have tax consequences during the time period of interest.
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