Profit describes performance
Accounting profit compares revenue with related expenses under the accounting basis used. Sales can include amounts that have not yet been collected.
Cash describes available funds
A profitable business may face cash pressure from slow collections, inventory purchases or earlier obligations. The profit figure alone does not show the full picture.
Keep both in view
Review collection dates, upcoming payments, receivables and payables. A simple cash flow forecast can help frame a useful conversation with your adviser.
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