Question

is it possible for a hospitality operation to be operating at a profit durany any given month but to simultaneously have insufficient cash flow during that same month

Answer 1

Yes

Step-by-step explanation:

Cash flow is defined as the available cash for business operation as a result of the difference between the cash available at the beginning of a period and the cash available at the end of that period ,

One major factor responsible for an insufficient cash flow is the bad timing of income and expenses. Imagine your bills are due and overdue customers invoices are not yet paid . It may also be that a lot is invested in the inventory while a little income is earned.

When more is being spent on investment compared to what is coming in , it can also lead to poor cash flow.

As an hospitality also engages in activities that could impact cash flow as mentioned above , it is possible it operates at profit and still have an insufficient cash flow.