The BizBuySell Small Business Community

  • Get Expert Advice

  •  • Find Local Service Professionals

  •  • Share Your Experiences

What's the difference b/n gross income and cash-flow? How do I calculate net profit based on these numbers?

No User Photo

Answer This Question

max 5000 characters

Web Reference (optional)

e.g., "www.mywebsite.com"

Review Community Guidelines

Help keep our Community clean and on topic. The BizBuySell Community is a place where you can discuss your questions, concerns and knowledge with others you can trust. It is not OK to use this forum to solicit others for personal or financial gain, or to rant about personal issues. It's all in the guidelines.

Submit Your Answer
Answers (3)
No User Photo
Carson Grant Loan Company
Affordable Loans
Los Angeles County, CA

DO YOU NEED A LOAN TO START A BEFITTING NEW YEAR!!!!!!

Are you a business man or woman? Are you in any financial stress? Or do you
need money to start your own business?

Do you have a low credit score, and you will find it difficult to get loans
from local banks and other financial institutions? solution to your
financial problem is Dr. Carson Grant The Terms and Conditions are very simple
and considerate.You will never regret any thing in this loan transaction because i will
make you smile through out this transaction, because you where not born to be a loser

Email (carsongrantloanhome@gmail.com)

Our services include the following:

* Personal Loans
* Debt consolidation loans
* Possibility
* Business Loans
* Education Loans
* Mortgage
* Home Loans

We offer loans at 2% interest rate

We offer loans to people in need of financial assistant with a low interest
rate of 2%. In order to get a loan with this company, you can tell the exact amount of
loan you need and the time in which you can pay back the loan.

NOTE: You are required to email us on:(carsongrantloanhome@gmail.com)

Feb 12, 2017
No User Photo

Email: chun.kome12@hotmail.com
Hello,

Good day to you and thank you for your time to read this.

We are financial services and asset management company.

Search for sustainable finances or the financial freedom to expand your business and company and to grow? We may add your company or a client / friend devise a plan for success help, We offer private loan to individuals.

For all types of companies - from small businesses to large corporate companies, we will help you to make your business the right type of financing for your business needs to lower interest rates and fast approvals will act quickly to require help new opportunities and immediate to meet needs.

For more details, please contact directly with your business plans or project view. EMAIL( chun.kome12@hotmail.com )

Best regards.

Jul 15, 2016
Buy-a- Company

Hi Yevgenly:

You have asked very important questions. Please do not enter into any purchase or sale agreement until you understand the profit & loss statement thoroughly.

While there should be defined answers for each of these terms, there are not. Make sure you ask the seller exactly what inputs have gone into each, as you may be surprised.

Typically, here are the definitions in practice:

Gross Profit: That is the amount of profit in a product, before any expenses (other than what it costs to produce: Cost of Goods Sold). For example, if you sell a widget for $85, and it costs $50 to produce, the Gross Profit is $35.

Net Profit: Take Gross Profit above and subtract all the other costs of doing business: Rent, advertising, employees (if labor is not part of COGS above), insurance, telephone, and on and on.

Cash Flow: This is subject to interpretation. Make sure you ask the other party how THEY define it. Typically, Cash flow is the net Earnings of the company Before Interest, Taxes, Depreciation, Amortization (EBITDA). Because the Buyer and Seller will have different situations for each of these, we net them out for proper comparison.

Many Sellers define Cash Flow and similar terms like Seller's Discretionary Earnings or Cash Flow as the above EBITDA plus discretionary or non-repetitive items, like fringe benefits (owner's use of company car, insurance, telephone, travel, etc.) If the owner wrote off $10000 for a car, and $10000 for a trip to Hawaii that had little to do with business, a true Cash Flow for comparison purposes would be to add those back in. The idea is to get a number for cash flow that the company's operations produces.

Now Generally Accepted Accounting Practices (GAAP) defines Cash Flow differently. They assume the seller did not write off any fringe benefits. The Cash Flow statement adds or subtracts and "Financing" items, like asset sales, loans, prepayments, etc. Simply the CASH flowing in and out of the black box that is a company.

Hope that helps. Bottom line: Ask the other party how THEY defined the terms, to make sure you both understand correctly.

Jan 10, 2012

Start a Discussion