Profit and cash flow often diverge. A business can be profitable on paper while running out of cash — typical when revenue is booked but not yet collected, or when inventory ties up working capital faster than sales convert to receipts.
The cash flow statement splits movements into three buckets: operating (day-to-day business), investing (capex, acquisitions, asset sales) and financing (debt, equity, dividends). Positive operating cash flow is the hallmark of a self-sustaining business.
Beispiel
A retailer reports CHF 200,000 in net profit but only CHF 30,000 in operating cash flow — most of the 'profit' is locked up in inventory and unpaid customer invoices.