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There are several ways in which one can make a small business extremely cash profitable. Some of these are: develop a profit strategy, invest in marketing, setting a profit goal, etc.
The retailers who sell the products directly to the customers are the primary customers for a wholesale business. They buy the products from the wholesalers,get cash/trade discount and sell them to ultimate customers at a margin.
An example of a planned inventory investment might be the purchase of inventory at a reduced price to gain a larger profit margin. Another example of a planned inventory investment might be the purchase of shelving or another cash register.
When the owner withdrawals cash for personal use,
As of October 28, 2008 - the price is around 89 cents per pound
The key to winning in the cash flow business is to watch that you do not overspend and that on average each transaction has a profit. The occasional loss is OK, as long as in the long run you profit.
In basic - Its important that the business owner sets out the expected cash out and cash into the business and also the cost of running the business to the hourly rate (daily rate in some companys). By knowing what its costing to run the business each hour you can then work out the break even figure ( no profit and no loss) and by adding an acceptable percentage to the product/running cost you have the profit margin
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 ) .
Total Cash Flow / 5years = Average Annual profit
Cash does not equal profit. For example, a depreciation charge is a cost to the business, but no actual cash is expensed.
Cash flow is different from profit. A business can have lots of profit, but low cash flow. This is due to the Accruals basis in accounting. A customer could pay on credit, it's recorded as profit on the moment of transaction but the organisation physically does not have the cash yet.
Drawings are reduction of capital as it is owner withdrawal of cash from business and it do not affect profit.
The goals of cash management should be applied to every business. Cash management ensures that a business can manage funds and maintain their operational need, business obligations, and profit goals.
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.
Advantage- gets cash. Disadvantage- you cannot say that you are a not-for-profit orginazation.
There are several ways in which one can make a small business extremely cash profitable. Some of these are: develop a profit strategy, invest in marketing, setting a profit goal, etc.
A company's cash flow is the amount of cash (or income) that goes into a business. Cash usually comes from a product or service that a company sells for profit.