This is their increase in cash, not what they make. A mature business usually has a cash reserve, and all profit is paid out to the owner. Example: Let's say y

This is their increase in cash, not what they make. A mature business usually has a cash reserve, and all profit is paid out to the owner. Example: Let's say you own a bakery. Rent is $3000 per month. You pay someone $3000 in salary, $3000 in utilities, and $3000 a month in ingredients. Your total sales are $24000 a month. The reserves of the business are $20,000 which you consider to be sufficient. As the reserves are sufficient, you pay out all profits (12,000$ a month) to yourself. Even though this business is very healthy and profitable, and can easily handle an economic downturn, cash inflow is equal to cash outflow.