Explain how the calculation of profit and operating cash flow provide different but complementary information, using Table
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Explain how the calculation of profit and operating cash flow provide different but complementary information, using Table 3.8 as your source of information.
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Table 3.8 Comparison of profit and operating cash flow for the month of September P. Mason's legal practice Revenues Fees/cash received Expenses Computer rental and online searches Gas Electricity Telephone/fax Salary of assistant Payment for insurance premium Total expenses/total cash paid Net profit of the month Increase in cash in the month Profit 8,820 (1,500) (100) (200) (1,000) (1,800) nil 4,600 4,220 Operating cash flow 7,620 nil (1,800) (540) (2,340) 5,280
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