– How can my business show a profit yet there’s no additional cash?

Question

– How can my business show a profit yet there’s no additional cash?

In: 0

Answer 1

Business is a continuous cycle, so while you may have profits you may have already committed that cash to new inventory. Also, there are non-cash considerations, like ways capital expenses get allocated over time. Maybe you bought a $50k delivery van this year, but then record the expense over the next 5 years.