Question

What is the difference between Cash Flow and Profit?

• A. Cash Flow is the cash collected and paid in a company’s core operations. Profit tracks the revenue from customers and the costs of doing business.

• B. Profit tracks the cash collected and paid in a company’s core operations. That’s why it’s called the bottom line. Cash Flow is the change in cash and cash equivalents from one year to the next.

• C. Cash flow is found on the balance sheet while profit is measured on the income statement.

• D. There is no difference, just different names.

Answer 1

Solution:

Difference between cash flow and profit is "Cash Flow is the cash collected and paid in a company’s core operations. Profit tracks the revenue from customers and the costs of doing business."

Hence option A is correct.