Cash Flow
by MaestriAny analysis of profitability would have to begin with a discussion of what profit is, where one can find it reported, and how one can measure it. Profit is viewed as the same thing as net income, which is the bottom- line result on the income statement. Net income is calculated as revenues and gains less expenses and losses. Most of the information on an income statement is related to operations and can be used to assess and understand how the business is performing.
The income statement is an accrual-basis income statement. This means that it contains information about economic activity that did not necessarily result in a cash flow.
For example, the sales revenue will most likely contain credit sales as well as cash sales. Sometimes, a company may even report net income on the income statement but negative cash flow from operations on the cash flow statement. The company may, for example, have paid cash for inventory or other resources that will not be consumed and expensed until next year. Or a company may report a net loss on the income statement and a positive cash flow from operations on the cash flow statement. (This is the case with the Dow Chemical Company financial statements that we will examine later in the chapter.)
Related posts:
- Investing on Sales Team One of the most important parts of a business is...
- Credit Repair Services Today, people are realizing that bad rating on your credit...
- Sales Outsourcing Atlanta I would like to discuss salesoverdrive.com that can increase sales...
- Great Ways To Make Money With PLR Products Private Label Rights or PLR are more popular nowadays as...
- Drop Shipping Company Shipping your product all around the world need good planning...
Related posts brought to you by Yet Another Related Posts Plugin.
