![]() Like cash flow, profit can be depicted as a positive or negative number. ![]() ![]() Profits might, for example, be used to purchase new inventory for a business to sell, or used to finance research and development (R&D) of new products or services. Profit can either be distributed to the owners and shareholders of the company, often in the form of dividend payments, or reinvested back into the company. It’s what's left when the books are balanced and expenses are subtracted from proceeds. Profit is typically defined as the balance that remains when all of a business’s operating expenses are subtracted from its revenues. The document shows the different areas in which a company used or received cash and reconciles the beginning and ending cash balances. Related: Financial Terminology: 20 Financial Terms to Know The Cash Flow StatementĬash flow is typically reported in the cash flow statement, a financial document designed to provide a detailed analysis of what happened to a business’s cash during a specified period of time. It’s the net cash generated to finance the company and may include debt, equity, and dividend payments.
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