By Barbara Nuss, CPA, Profit Soup
The Statement of Cash Flow Has the Answer
Any seasoned business owner or advisor has seen it happen. The business showed a handsome profit at the end of the year and mysteriously the cash balance plummeted. The first question the owners, accountants and lenders ask is, “where is all the cash?” The Statement of Cash Flow is an underutilized report that answers that vexing question.
Profit and Cash Are Not the Same Thing
Before we get to the report, let’s start with the premise that profits and cash are not the same thing. Here is an example: