u still got to pay from that cash flow TAXES, labor,
material, marketing, equipment etc etc.
after ALL that what u got is 'profits'.
cash flow just shows there are sales.
for profit the sales have to be above costs.
For example it costs $10 to make a purse. If I sell it for $10 there is cash flow. Cash is being spent on materials and then sold back to a consumer. But there is no profit. You aren't making any money
Cash flow is just the amount of money coming in and being paid out.
Profit is Total sales minus total expenses.
In the "Accrual method of Accounting" if you sell something on credit - you receive no cash at that time, but you have income, expenses and profit - when the bill is paid - you receive cash, but no income is recorded
