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Urgent query

Abhinandan (student) (407 Points)

22 March 2011

What is Difference between cash flow and profit

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8 Replies

Pankaj Arora (Learner) (3134 Points)
Replied 22 March 2011

From cash flow we stands how much cash we recd from our debtors and profit means what company earned during the financial year after subtracting all expenses related to business direct or indirect..

Vikas Marele (CA in Service) (1144 Points)
Replied 22 March 2011

Abhinandan ur talking about ''Cash inflow & Profit" or ''Cash flow chart & P&L a/c''......?

Ram Thakkar (CA final ) (126 Points)
Replied 22 March 2011

Hey dear

Cash Flow means Cash Inflow Less cash outflow- Actual Cash movement in the business......

& Profit means Income Less Expenses - it is accural basis so Profit realised in the business.

Maanik (Financial consultant) (22 Points)
Replied 22 March 2011

Hi,

I wanted to know that refundable security deposited by a Pvt COMPANY with government for a contract has been forfeited for not complying with the terms. Is it to be treated as a business loss??

If by agreement two other parties had contributed 60% of the security amount to the company to share profit or loss of the company and now the company forfeits that money.. What wld be its tax treatment??

Thanx for ur suggestions...

(Guest)

cash flow means cash inflow less cash out flow

profit means profit earned by the company duing the f/y whether actually rereiced or accrual

Abhinandan (student) (407 Points)
Replied 22 March 2011

TO ca in service

I mean cash inflow and profit.................

Senthilraja (Chartered Accountant) (57 Points)
Replied 22 March 2011

Dear Abi, Profit shows the performance of the company but Cash flow shows how well the funds are managed in the Company. Even though profit is Important Cash flow is much more important because cash flow affects the business from top to bottom. In the Context of Income tax we see Cash flow in comparing Rent free Accomodation and HRA mostly. But You see cash flow is the most important factor in choosing options in Tax planning rather than profit we earn from it.