The Difference in Profit and Cash Flow
The three most important financial documents that a business owner should be looking at are their Balance Sheet, Income Statement, and Statement of Cash Flows. If you’re not receiving that third one from your accountant, it’s time to ask. Why is it so important? Because you can run a business at a loss – but not without cash!
The Statement of Cash Flows will show you the movement of money in your business within a specific time frame, including your operating, investing, and financing activities.
Profit is theoretical, based on how it gets reported, but cash is real. Watch my second video in a three-part series, The Difference in Profit and Cash Flow, to learn more about how your profit picture can change on paper and what your Statement of Cash Flows should include. While you’re watching, please subscribe to my YouTube Channel. And feel free to contact me with questions about your own cash flow situation or statement.