5 Cash Flow VS Profit 42 Flashcards
What is Revenue ?
Revenue is the value of sales made over a specified period: a day, a month or a year and only comes from one source ( Customers )
However cash inflow can come from many sources like: selling a old warehouse or taking out a bank loan
Differences between Cash flow and Profit ?
CASH FLOW
- Cash inflow can come from many sources like selling an old warehouse or taking out a bank loan
PROFIT
- Revenue can only come from source which is the customers
Differences between Costs and Cash outflows ?
CASH OUTFLOWS
- There are many reasons why a firm might pay out cash like paying dividends to its shareholders or repay a bank loan
COSTS
- E.g. Purchase from suppliers with credit