Q » How does cash flow differ from net profit in financial reporting?
09 Dec, 2025
A » Cash flow refers to the actual inflow and outflow of cash within a business, highlighting its liquidity and ability to sustain operations. Net profit, on the other hand, represents the residual income after all expenses, taxes, and costs are deducted from total revenue. While net profit indicates profitability, cash flow emphasizes the company's capacity to manage financial obligations and invest in future growth.
09 Dec, 2025
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