STUDENT TRANSPORTATION INC 5.25 PCT DEBS T.STB.DB.A

RE:RE:RE:School buses: Poor wages and working conditions

[carmech]

Yes frankstevens17, many people don't understand the difference between cash flow and profit and you are one of them. Profit is an artificial number used to determine how much tax the company pays. Companies use tricks such accelerated depreciation and other things to keep reported profit and thus taxes to a minimum or nil. For instance the cost of a bus might be expensed over 5 years when in reality it is used for 15. Goodwill which is the cost of buying another business  over the value of the physical asset  can be constantly written off (reducing profit) by a company such as stb which is always buying other business. There are many other tricks that can be used by tax accountants to keep profits and taxes to a minimum. Positive cash flow however is real money flowing into a business in excess of the amount needed to run the business. It is a truer indication of a healthy business. That is why it is reported in the quarterly reports. I have training in management accoounting.