what is the difference between income statements and cash flow?

Answer 1

Cash flow is actual money that comes in and out.

An income statement is a piece of paper with some accounting numbers on it. Did you mean to ask "What is the difference between earned income and cash flow?"

Earned Income is an accounting number that represents earnings that are reported for tax purposes, etc. To get the cash flow from the earnings, you need to adjust for things like changes to working capital, capital expenditures, the non-tax effects of depreciation, interest payments and taxes on interest. You also need to add cash raised by selling debt or equity and subtract the value of debt that is paid off or equity that is retired.

A good source for the calculations needed is Brealey & Myers classic textbook on Corporate Finance.

Answer 2

income statements include non-cash items like depreciation.
Cash flow includes only cash...liquidity.

Think of income statements as that thing that gets you from the BOY balance sheet to the end of year balance sheet.

Answer 3

Cash Flow shows the ACTUAL IN AND OUT OF CASH while the income statement already include in its sales the accounts receivables (debt of the buyer), and in its expenses the accounts payable (debt of the company/business)even though no actual cash in and out has really occured yet.

Im not one hundred percent sure but this is how i remember it.
hope it helped.

Answer 4

Income statements consider all income; paychecks, cash, interest on savings accounts, gifts and donations, etc.

Cash flow is the amount of spendable income only (your paychecks/tips/cash).