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
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278ONE 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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Petty cash statement.xls
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