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THE INCOME STATEMENT & THE CASHFLOW REALLY ARE THE SAME, AREN’T THEY…?

THE INCOME STATEMENT & THE CASHFLOW REALLY ARE THE SAME, AREN’T THEY…?. M. Piczak December 2005. THE INCOME STATEMENT. A sale is not recorded until an invoice or bill is made up With a sale, money does not necessarily show up at the time of the transaction

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THE INCOME STATEMENT & THE CASHFLOW REALLY ARE THE SAME, AREN’T THEY…?

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  1. THE INCOME STATEMENT & THE CASHFLOW REALLY ARE THE SAME, AREN’T THEY…? M. Piczak December 2005

  2. THE INCOME STATEMENT • A sale is not recorded until an invoice or bill is made up • With a sale, money does not necessarily show up at the time of the transaction • Some items on income statement are non-cash flow such as depreciation, goodwill amortization • Is an external statement with internal purposes • Monthly, quarterly, yearly (longer time horizon)

  3. THE CASHFLOW STATEMENT • Cashflow does not occur until there is an impact on your bank account as in money in or money out • Are simply following the money • Is an internal statement although banker may want to see it in the beginning • Monthly, weekly (usually a shorter time horizon)

  4. IMPACT OF TRANSACTIONS

  5. MORE TRANSACTIONS

  6. LAST TRANSACTIONS

  7. SO, DOES CF=IS? NO

  8. THE INCOME STATEMENT & THE CASHFLOW REALLY ARE THE SAME, AREN’T THEY…? M. Piczak December 2005 The end

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