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Definitions:


The term cash includes:
• Coins & notes
• Current account balances


Cash is used to pay:
• Suppliers
• Employees
• Lenders
• Investors
• Tax


Profit is when a product or service is sold for a higher price that it cost to produce. Profit is equal to sales but not cash received from customers.


The first thing to remember is that Profit is NOT Cash!


Cash is generated with cash inflows exceed outgoing costs.
Example: profit=sales – outgoing costs
The link between profit and cash is TIMING!