the number two reason for small business failure is poor cash management. Class, do you think profit and cashflow is the same?
2007-09-26 16:37:22 · 3 answers · asked by shawntaelsey123 1 in Business & Finance ➔ Other - Business & Finance
Here's an excellent article on why cash flow is not profit.
2007-09-26 17:37:08 · answer #1 · answered by Sandy 7 · 0⤊ 0⤋
The ability of a business to meet its financial obligations, or debts, is called solvency. The ability of a business to earn income is called profitability. The factors of solvency and profitability are interrelated. A business that cannot pay its debt on a timely basis may experience difficulty in obtaining credit. A lack of available credit may in turn lead to a decline in the business's profitability. Eventually, the business may be forced into bankruptcy. Likewise, a business that is less profitable than its competitors is likely to be at a disadvantage in obtaining credit or new capital from stockholders.
I hope this helps.
2007-09-27 00:43:01 · answer #2 · answered by fivestring46 4 · 0⤊ 0⤋
No. I don't just think, I know.
2007-09-27 00:15:58 · answer #3 · answered by Andy 3 · 0⤊ 0⤋