Explain the difference between cash and profit, Financial Management

Assignment Help:

Explain the Difference between cash and profit

Cash flow statement shows all the cash in and cash out for the organisation for that period. It demonstrates the cash generating ability of the organisation. Income statement on the other hand shows profitability of the business during that period. Income statement is prepared using the accruals concept. This is where revenue and expenses are recognised in the period that they are incurred and not in the period the cash is received or paid. That's why you have a difference between profit andcash.

 


Related Discussions:- Explain the difference between cash and profit

Exchange Rate Parity Conditions, 1) According to the IFE (RIP), if U.S. inv...

1) According to the IFE (RIP), if U.S. investors expect a 3% rate of domestic inflation over one year, and a 6% rate of inflation in European countries that use the EUR, and requir

6 KEY STAGES OF INVESTMENT DECISION WITH APPROPRIATE DIAGRAM, 6 KEY STAGES ...

6 KEY STAGES OF INVESTMENT DECISION WITH APPROPRIATE DIAGRAM

Acquisition strategy, T he acquisition strategy The most important str...

T he acquisition strategy The most important strategic consideration is the size of the acquisition. The completion of smaller series should be considered in the beginning tha

Discounted pay back period (dpbp), Discounted Pay Back Period (DPBP) : ...

Discounted Pay Back Period (DPBP) : The discounted payback period is the number of periods taken in recovering the investment outlay on the present value basis.  Discounted pa

Convertible bonds, Basics of Convertible Bonds The provision of convers...

Basics of Convertible Bonds The provision of conversion in a corporate bond entitles the bondholder the right to convert the bond into a predetermined number of shares of commo

Emerging market bonds, Emerging market bonds are the bonds offe...

Emerging market bonds are the bonds offered by less developed countries. The government normally issues them. These exclude borrowings from gove

Financial Managemente.., Madhuban group manufactures a product. The followi...

Madhuban group manufactures a product. The following particulars are as follows: 5 Monthly demand 1000 units Cost of placing an order Rs. 100 Annual carrying cost per unit Rs. 15 N

What is over capitalization, Question 1 What is over capitalization? How d...

Question 1 What is over capitalization? How do we know over capitalization has occurred? Question 2 Explain permanent and temporary working capital Question 3 A. What ar

Illustrate the audit plans, Illustrate the audit plans Audit team must ...

Illustrate the audit plans Audit team must be sufficiently familiar and fully briefed by manager and have knowledge of the business or operation such that to be able to carry o

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd