RE:CASH FLOW..... VS ..... IMPAIRMENTS .....VS... PROFITSThink of it this way:
1) Someone pays you $5000 for a ride somewhere and you get there with no problems. You have Cash Flow of $5000 CASH and profit of $5000.
2) Someone pays you $5000 for a ride but you hit a pot hole and damage your car and now worth $4000 less. You have $5000 CASH and book and Impairment of $4000 and Profit of $1000.
In situation #2, you have $5000 CASH in HAND and paying Taxes on only $1000.
In situation #1, you have $5000 CASH in HAND and paying Taxes on $5000.
Which situation would you rather be in?????
All just my opinion/view/thinking
RagingBull3 wrote: You want your Operating Cash Flow Statement to be Positive From PROFITS NOT from reversal of Impairments/depreciation.
I guess you can call it the "QUALITY" of the Cash Flow. One's good, the other not so good.
All just my opinion/view/thinking