If a company has high net income,it may still have difficulty paying its bills.

Question

Quizplus · Accepted Answer

Net income is simply the company's revenue minus expenses. However, a high net income does not necessarily mean that the company has enough cash on hand to pay its bills immediately. This is because net income does not take into account the timing of receivables and payables, and cash flow may be impacted by non-operational expenses such as debt repayment or capital expenditures. Ultimately, a company's ability to pay its bills depends on its cash flow, not just net income.

If a Company Has High Net Income,it May Still Have