question about profit of a business

[breatheeasy17]

Say a business has a Yearly Gross Income of $205,000 and a Yearly Cash Flow of $95,000. Does that mean at the end of the year after all expenses have been paid. The company made $95,000 in profit? If not could someone clarify this for me. Thanks

[ocomys]

Cash flow is simply all money going in and out. It's not related to profit.

Profit & loss are directly related to income and expenses.

Therefore....if you have an income of $205,000 and your expenses tally $95,000.......your profit before taxes would be $110,000

[WanganRunner]

Cash flow is simply all money going in and out. It's not related to profit.

In a strict accounting sense this is 100% correct, however I have seen advertisements for businesses for sale that use "cashflow" to indicate Net Profit, and even stranger, sometimes they use it to indicate Gross Margin.