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Q. Johnny Cash owned a local construction company. After paying all his
bills, his checking account was overdrawn by $1000 because of lack of funds.
Johnny knows he was not profitable because he measured profit by how much
cash he had in the bank?
A. False. Cash flow and profits are not synonymous. Cash flow is a
component of profit. Poor cash flow can destroy even a profitable company.
Contact Krumm & Associates, CPA's with your questions on our
professional accounting so we may eliminate your cash flow management
problems.
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