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Profit vs Cashflow

Profit vs Cashflow

Date: Aug 19 2008

Topic: Business English

Author: samjj

Lesson

Many business entrepreneurs mistaken that so long as they make profit from their business , their business are doing fine. This misconception always leads to business going bust as cashflow has been ignored !

Profit is what's left after deducting all expenses incurred in the business. Profit is necessary for a business to survive. A business will not last long without making sufficient profit from the business operations.

Cashflow is positive when the money coming into the business far exceeds the money going out of the business. Cashflow is the lifeblood of a business . A business operating without a positive cashflow will be unable to meet its financial obligations.

Yes , making a profit is what starting a business is all about , but equal attention is to be paid to the cashflow. A business needs both profit and cashflow to be healthy.

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gabinet

Estonia

pro

09:37 PM May 12 2010 |

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