BOTH ARE EQUALLY IMPORTANT TO THE BUSINESS.
ONE AFFECTS THE OTHER.
IF THE CASH FLOW IS NEGATIVE, WHICH MEANS MORE
BORROWED WORKING CAPITAL, WHOSE INTEREST PAYMENTS
WILL AFFECT THE BOTTOMLINE [ PROFIT ].
IF THE PROFIT MARGIN IS NOT SUFFICIENT TO SUSTAIN
THE BUSINESS OPERATION , IT MEANS THERE WILL BE
LESS CASHFLOW, WHICH MEANS MORE
BORROWED WORKING CAPITAL, WHOSE INTEREST PAYMENTS
WILL AFFECT THE BOTTOMLINE [ PROFIT ].
CASHFLOW NEEDS CLOSE MONITORING,PERIODICALLY, say WEEKLY.
PROFIT NEEDS MONITORING, say , MONTHLY.
=========================================
CASH FLOW
CASH FLOW is the summary statement shows
-money receipts by the organization
-money payments by the organization
-IF THE total receipts is greater > the total payments , then cashflow is positive.
-IF THE total receipts is less < the total payments, then cashflow is negative.
REGARDS
LEO LINGHAM
From India, Mumbai
257ONE AFFECTS THE OTHER.
IF THE CASH FLOW IS NEGATIVE, WHICH MEANS MORE
BORROWED WORKING CAPITAL, WHOSE INTEREST PAYMENTS
WILL AFFECT THE BOTTOMLINE [ PROFIT ].
IF THE PROFIT MARGIN IS NOT SUFFICIENT TO SUSTAIN
THE BUSINESS OPERATION , IT MEANS THERE WILL BE
LESS CASHFLOW, WHICH MEANS MORE
BORROWED WORKING CAPITAL, WHOSE INTEREST PAYMENTS
WILL AFFECT THE BOTTOMLINE [ PROFIT ].
CASHFLOW NEEDS CLOSE MONITORING,PERIODICALLY, say WEEKLY.
PROFIT NEEDS MONITORING, say , MONTHLY.
=========================================
CASH FLOW
CASH FLOW is the summary statement shows
-money receipts by the organization
-money payments by the organization
-IF THE total receipts is greater > the total payments , then cashflow is positive.
-IF THE total receipts is less < the total payments, then cashflow is negative.
REGARDS
LEO LINGHAM
From India, Mumbai
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