It is possible for a company to be profitable,yet not have enough cash to pay its bills.

Name: It is possible for a company to be profitable,yet not have enough cash to pay its bills.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Accrual basis net income is the excess of revenues earned over expenses incurred.Revenues do not necessarily equal cash receipts and expenses that do not necessarily equal cash disbursements.A profitable company may not be able to pay its bills if it does not collect cash from customers quickly enough.

It Is Possible for a Company to Be Profitable,yet Not