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We have discussed that the probit (i.e, earnings) that the fimm makes is usually not equal to the cash generated by the firm. This differentiation

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We have discussed that the probit (i.e, earnings) that the fimm makes is usually not equal to the cash generated by the firm. This differentiation is important. For example, a profitable firm (i.e, earnings is positive) may not have the cash to pay out its employees, rent, interest expenses and other financial obligations, causing the firm the close its doors. On the other end of the spectrum, a firm that is not profitable may have the cash, which would give the firm an opportunity to fight to live another day. Explain two reasons why earnings may not equal cash flow of the firm

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