Lester is watching the bank balance decline throughout the month and hopes his company won't run out of money before it runs out of month. Lester is concerned about the net cash flow, which is the
A) difference between cash inflows and outflows.
B) difference between revenues and expenses.
C) same as net profit.
D) same as working capital plus inventory.

Question

Quizplus · Accepted Answer

Net cash flow is the difference between cash inflows and outflows, as it represents the actual movement of cash in and out of the business. It is different from net profit, which can be affected by non-cash items such as depreciation, and working capital plus inventory, which is a measure of the level of current assets available for operations.

Lester Is Watching the Bank Balance Decline Throughout the Month