What Is the Difference Between a Profit (Net Income After

question 113

Essay

What is the difference between a profit (net income after taxes) on an income statement and the cash balance reflected at the bottom of the statement of cash flows?

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Definitions:

Payee

is the party in a financial transaction who receives the payment.

Maker

In the context of finance, a maker is typically a party that creates or executes an order, often in trading or banking environments.

Receivables Turnover Ratio

A financial ratio that measures how effectively a company uses its assets by comparing net credit sales with average accounts receivable.

Average Collection Period

The average number of days it takes for a business to receive payments owed by its customers for sales made on credit.