Why you made a profit but have no cash
VAT held for the tax office, stock paid for before it sells, payouts not yet in.
Cash ahead explains the gap between profit and cash in plain lines: VAT you collected and will pay, stock you paid for that has not sold, payouts still on their way, and bills paid ahead. The reverse is shown too — cash in the bank that is not profit, such as VAT not yet due.
The cash cycle — days stock sits, days to be paid, days you take to pay suppliers — is shown beside it.
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