Turnover, profit and cash flow: what they actually mean

Turnover

Turnover is the value of sales generated by the business before deducting costs.

Profit

Profit is what remains after relevant costs are deducted. Different profit measures may be used for different purposes.

Cash flow

Cash flow is the timing of money entering and leaving the bank. A profitable business can still run out of cash if customers pay slowly or large bills fall due first.

Use all three

Track sales, profit and bank balance separately. One number never tells the whole story.