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An entity whose profits exceeds its expenditure can lend or spend the excess revenue to help that surplus cash flow create extra cash flow Later on. However However, an entity whose money is below its expenditure can elevate money by borrowing or selling equity claims, lowering its expenditures, or rising its income.

one. Beginning cash equilibrium consists of the final closing income harmony of the final time period (the remaining hard cash from the last year’s earning)

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