Cash Flows Compared to a Lemonade Stand

Cash flows as defined in The End of Accounting:

Cash flows are inherently different from earnings. They simply are the difference between cash received during the period from customers and paid to suppliers of services: vendors, employees, utilities, and more. Cash flow is a much simpler metric, more straightforward and easier to compute than earnings. It is, in essence, a “lemonade stand” measure: By the end of the day, your profit is total receipts from thirsty drinkers minus the cost of concentrates, ice and assistants’ (often below minimum wage) pay.

Source: Baruch Lev and Feng Gu | The End of Accounting | P. 17 | 06/02/2016 | Visit