Cash flows and profits are synonymous; in other words,higher cash flows equal higher profits.

Question

Quizplus · Accepted Answer

Cash flows and profits are not always synonymous, as cash flow is the amount of money flowing in and out of a business, while profits are the amount of revenue that exceeds expenses. It is possible for a company to have high cash flows but low profits, for example, if they are investing heavily in expansion or infrastructure. Conversely, a company may have high profits but low cash flows, for instance, if they have a large amount of unpaid invoices or other outstanding debts. Therefore, higher cash flows do not always equal higher profits.

Cash Flows and Profits Are Synonymous; in Other Words,higher Cash