3.7 Cash Flow is the movement of cash inflows (this includes money from selling things and services) and the cash outflows (money going out, i.e. paying for business)
- 3.7 Cash Flow is used to measure health of a financial health of a business
- Comparison of cash inflows and cash outflows lets managers see if their business has enough money to pay costs and maintain operations
Profit is money after you subtract total costs
Cash is not always received immediately! People may buy on credit (see Profitability Ratios). This can lead to negative cash flow, even though they make a profit
Tesla was only profitable until 2020. But to make a profit, they needed capital. This was only possible with cash flow (which can come from revenue)