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Cash flow, not profit, is the key to a healthy business. The “cash” here refers simply to money, not to hard currency. Cash flow is the movement of money in and out of the business: the money received or otherwise generated by the business, minus the money used to pay for its expenses, over a finite period of time. A positive cash flow, in which received cash consistently exceeds the amount of cash payments, is the central goal of any business.

Net income (the sum remaining after all expenses have been met or deducted) is usually used to determine a business's profitability; however, it can become artificially deflated by noncash expenses like the depreciation of fixed assets.

Even a profitable business can fail or experience serious problems ...

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