What’s the Difference Between Gross Revenue and Profit?
Gross revenue looks only at the amount of money earned from sales or business operations in a period. Profit subtracts out the cost of earning that revenue, meaning profit will be less than revenue.
Is Free Cash Flow the Same as Profit?
Free cash flow looks at a company’s revenues after subtracting out costs to generate that revenue and maintain assets like machinery. You can calculate it by finding net profit, then subtracting out things like capital expenditures and changes in working capital.
How is Cash Flow Different From Revenue?
Revenue measures only inflow to a business from selling goods and services. Cash flow is different because it also looks at outflows of money and considers all sources of income and expenses.

Final Word

A company needs to generate both strong cash flows and profits to survive. Good cash flow means a company can pay its bills while high profits mean the company is generating a positive return from its operations. Keeping an eye on these two metrics will let business owners quickly respond to problems that could reduce cash flow or profit.

About the Author

TJ Porter

TJ Porter

Personal Finance Writer

I have in-depth experience in reviewing financial products such as savings accounts, credit cards, and brokerages, writing how-tos, and answering financial questions both simple and complicated.

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