Example Concept: Cash flow is a measure of a company's liquidity, reflecting the actual cash available for operations, investments, and financing activities. It includes cash inflows from sales, loans, and investments, and outflows for expenses, loan repayments, and asset purchases. Profit, on the other hand, is calculated on the income statement as the difference between total revenue and total expenses, showing the company's ability to generate earnings over a specific period. While profit indicates financial success, positive cash flow ensures the business can sustain operations and growth.