The Income/Outcome^® Contextuary

a visual glossary of corporate finance

Income/Outcome Business Simulations Home

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We use "business visualization" to graphically simplify complex business concepts (and increase business acumen). To get more information on business visualization, please see "The Company Board" (our business results visualizer) and Income/Outcome (our customizable business simulation).

The following are our generic explanations of common corporate financial terminology. Actual meanings can vary wildly from company to company; in order to have the correct internal definition you need to ask your Finance Department, "What do you mean by that?"

To get more information about the authors, please see our Directory of Contributing Editors.

Profit & Cash

Understanding the Cash Flow of a business is as essential as understanding Profit.

Profit is like food - you need it for the business to grow and to be healthy and strong; but you don’t have to eat all the time. But cash is like air – you need it constantly. If you run out, and cannot immediately get more, you die.

Profit happens on the Income Statement. Cash happens on the Balance Sheet. The two have to be managed separately.

Full it flag term list.

The Income/Outcome® Contextuary

a visual glossary of corporate finance

Profit & Cash

The Income/Outcome^® Contextuary