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What are two common ways that cash can become an issue even if profit is not?
Wiki User
∙ 11y ago
Cash can become an issue in the event of late payment by a customer leading to cashflow problems. Similarly, an unexpected and unbudgeted cost can lead to cash being an issue if the business does not have sufficient funds to cover the cost of, for instance, replacing a vital piece of manufacturing machinery due to sudden failure which could halt production. Retained profits within the business might be available to cover the shortfall however.
Wiki User
∙ 11y ago
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Is profit more important than cash?
Profit and cash can be the same thing. You can have profit on the books and not have the cash because it can be tied up in various processes. Your actual disposable income is the most important.
What profit is the difference between the incoming cash and outgoing cash?
cash balancing
What is the difference between profit and cash?
Cash is liquid asset - it is the money we received not what we are promised for . Cash can also flow out of business while profit is earned by business and is represented on paper ( in the accounts ) .
Why profit is not equal to cash in accounting?
You could sell merchandise and make a profit. If the customer has not paid you yet, you have not increased cash. You have increased accounts receivable.
What are the advantages and disadvantages of profit maximization?
The advantages of profit maximization is that creates a cash flow and investors become interested in companies that are maximizing their profits. The main disadvantage of it is that there are risks for business owners involved.An advantage of profit maximization is that it could create a huge increase in cash flow as long as the market remains good. However, a disadvantage is that if the market collapses during a period of profit maximization the business could lose everything.
What do you mean by cash profit?
Cash profit means profit after tax plus depreciation.
What do you mean by cash?
Cash profit means profit after tax plus depreciation.
What you mean by cash?
Cash profit means profit after tax plus depreciation.
How is math used in stores?
cash register...profit...revenue cash register...profit...revenue
What new cash crop has become common in Afghanistan?
wheat , opium
Is profit more important than cash?
Profit and cash can be the same thing. You can have profit on the books and not have the cash because it can be tied up in various processes. Your actual disposable income is the most important.
Why the increase or decrease in cash is different to the profit or loss?
Cash does not equal profit. For example, a depreciation charge is a cost to the business, but no actual cash is expensed.
What profit is the difference between the incoming cash and outgoing cash?
cash balancing
What is the differenc ebeween profit and cash?
cash is money in general but a profit if a little more than what you normally make
My corporation issue 2000 shares of no-par common stock at a cash price of 9.00 per share how do you journalize the issuance of the share?
Debit "Cash" for $18,000 and credit "Equity - Common Stock" for $18,000.
What is the difference between profit and cash flows?
Profit mean that when a company sales turnover more so extra income that we get is profit. Cash flow means inflow & outflow of cash when there is any expenses or income earned.
What is profit before depreciation?
The answer is in the question really. It's the profit a business makes before depreciation is charged. As depreciation is a non cash item it could be argued that it's the cash profit. However, there could be provision in there so calling it the cash profit is not strictly true.
