curio

money

A profitable sale can still leave a business short of cash

A business finishes a job for more than the work cost. That's a profit. But the customer won't pay until next month. Wages and rent are due this week.

In its records, the business can already count the sale as income. Yet no money has arrived.

The bills come first. Without spare cash, the business may struggle to pay them.

Source: sec.gov

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