Net Income vs Operating Cash Flow
Net income and operating cash flow are not the same thing, and they can be very different.
A company might report net income yet negative operating cash flow, or conversely report a net loss and yet positive operating cash flow.
That’s because net income is a company’s profit calculated using accrual accounting, not cash-basis accounting. This means net income increases with credit sales, where cash hasn’t yet been collected, and it decreases with non-cash expenses, like depreciation and amortization.
Operating cash flow, on the other hand, is the actual cash a company is generating from its core business operations. It increases when cash is collected from customers and decreases when expenses are paid, and it’s not affected by non-cash charges
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