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Why do my cash and profit figures differ?

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A simplified indirect-method bridge from accrual profit toward operating cash. Changes in receivables, inventory and payables must be signed increases or decreases.

Enter a loss as a negative number.

Positive = receivables increased and used cash. Negative = receivables fell and released cash.

Positive = inventory increased and used cash. Negative = inventory fell and released cash.

Positive = payables increased and preserved cash. Negative = payables fell and used cash.

Non-cash expense included in net profit that should be added back in this simplified bridge.

Koala's Calculated Result
Net profit + non-cash add-back − increase in receivables − increase in inventory + increase in payables.

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Enter net profit and any relevant changes in receivables, inventory, payables and depreciation/amortisation.

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Definition and method

What this calculator answers

Reconcile accrual profit with operating cash via working-capital changes and D&A — the difference between profit and bank movement.

Simplified operating-cash bridge

A common simplified bridge starts with net profit, adds back non-cash depreciation, subtracts increases in receivables and inventory, and adds increases in payables. Decreases in those balances have the opposite sign.

Worked example: your figures

The interactive result above is the worked example. Change any input and the same deterministic engine recomputes the answer; this page does not insert a generic example business or silently treat example values as a benchmark.

  • No market benchmark or outcome is silently inserted by this page.

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Frequently asked questions

What is cash vs accrual profit?

Cash = profit − Δ receivables − Δ inventory + Δ payables + depreciation. Reconciles accrual profit with the actual cash movement; a positive spread on cash-positive operations is the genuine operating cash flow.

Cash vs Accrual

When do accrual and cash differ most?

When the business changes receivables or inventory quickly — a 50% order uplift adds receivables and stock by 50% — even when net profit is positive. Fast-growing businesses find this the painful bridge to an honest cash read.

Cash vs Accrual

Where does ΔAR (depreciation and amortisation) fit in?

D&A is a non-cash expense — it reduces profit but does not consume cash. Adding it back is the standard reconciliation adjustment and is the reason ebitda-style measures add it back.

Cash vs Accrual

What's the right way to size accrual-to-cash adjustments?

Compare this period vs last period (Δ) for each balance-sheet-line that materially drives cash: AR, inventory, AP, prepayments. A small change means the adjustment is small; a big one means it materially distorts the report.

Cash vs Accrual

Educational use, not financial advice. Numbers are estimates for planning; consult a qualified professional before acting on them.