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 Describe how these statements are tied together.

Explain why in finance cash flow is more important than accounting income.

 Explain why accounting profits do not necessarily equal cash flow. Discuss at least two GAAPs (Generally Accepted Accounting Principles) in your answer.

 Many people pay for their groceries with either a check or cash. If a grocery store chain has 30 days to pay its suppliers, and the average length of time food items stay on the shelf before being bought is 10 days, what can you say about this company’s cash cycle and financing gap?