What is the difference between "profit" and "cash flow"?
A) Profit refers to what is left after expenses have been subtracted from revenues, while cash flow refers to cash receipts and cash payments.
B) A firm cannot make a profit unless its cash flow is positive.
C) A firm can maximize its profit only at the expense of cash flow.
D) A firm can maximize its cash flow only at the expense of its profit.
E) There is no real difference between profit and cash flow.

Question

Quizplus · Accepted Answer

Profit refers to the amount of money a business earns after deducting expenses from revenue. It is an accounting concept and is typically calculated over a period of time, such as a month or a year. Alternatively, cash flow refers to the cash receipts and cash payments that a business makes during a specific period. It is a measure of the actual money that comes in and goes out of a business. While profit is important, cash flow is also critical to a company's success, as it reflects the amount of money that is available to invest in the business, to pay off debts, and to distribute to shareholders.

What Is the Difference Between "Profit" and "Cash Flow