How to increase profit in the business?
Comparing Cash Flow and Profit to increase the money in hand. Cash is essential to the day-to-day operations of a business. Especially for growing businesses, good financial management can lead to business success. It is important to remember that cash does not mean profit. Many businesses fail to do this not because they are unprofitable, but because they have no cash. Your income may not equal income in your financial statements for a number of reasons: Your business may have recorded sales revenue but not yet accepted payments because customers paid on credit. The income statement does not list all the costs you have to pay because costs are only included when inventory is closed. The income statement also records its cost (via depreciation) over the life of the asset, but you cannot pay for it. Cash Flow Cycle In a normal business, every business has a cash cycle, which shows how cash flows in and out of the business. You use cash to buy products and pay vendors, and you...