I am trying to answer the following question. I have reviewed and understand the difference between cash and accounting accrual. The scenario is the company has completed its first year in a new business. They have offered 6 month financing to their customers. They have paid cans upfront for all purchases and paid for 2 years of insurance. Due to cash shortage they are not able to pay their employees until the first week of next year.How can I go about explaining or the company showing a positive net income but not able to pay the employees due to cash shortage. What formula would I use

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