Q 2. Describe the difference between profit and cash.
3. What are the differences between cash from operating activities, cash from investing activities, and cash from financing activities.
The profit and cash are two factors that indicate the heath of the business. The profit of the organization can be measured by the difference between the total revenue and the total costs. It means the profit is the amount that the business would be in the hand after spending all its costs. There are mainly two types of profit in a business, the economic profit and the accounting profit. The accounting profit considers only the financial expenses, but the economic profit considers the economic costs or the implicit costs of the organization.