You start with your net profit from the P&L statement, then add back things like depreciation that don't involve actual cash leaving your hand, and finally adjust for changes in your inventory and what customers owe you. Honestly, yaar, I learned this because my chacha’s garage accountant showed me on a single sheet—the books said a profit, but my wallet was empty due to all the pending payments from catering orders. The obvious answer is it's just a formula, but the real calculation is seeing if you have enough cash left after all that to pay the EMI without your mother making that quiet dua.
#startups#business
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