4 ms·
Accounting is complicated. For example, let's say you buy a box for $50, pay it right away, then sell the box and deliver it on December for $100, but the buyer
by ucaetano 10y ago
Accounting is complicated. For example, let's say you buy a box for $50, pay it right away, then sell the box and deliver it on December for $100, but the buyer only pays you in January.
Then you need to publish your results for this year. How do you do it?
P&L statement:
Revenue: $100
Costs: $50
Profit: $50
Cash flow statement:
Cash from sales: $0
Cash paid to suppliers: $50
Net cash flow: -$50
So you had a negative cash flow, but was profitable.