INTERFERENCE BETWEEN PROFIT AND CASH-FLOW IN EVALUATING ECONOMIC PERFORMANCE

Abstract

Performance represents the main target for stakeholders interested in the activity of the companies. To deal with all challenges, and to be prosperous, attractive, efficient and promising development, a company must obtain a profit. In addition to profits, the cash-flow represents the substrate vital for development, sustainable financing and the survival of an entity in a dynamic business environment, being a true indicator of performance measurement. The purpose of this article is the evaluation of performance of an entity, seen from the angle of profit and cash flow, as essential indicators in the assessment of the health status of the entity. The research is based on a comparative analysis of performance through indicators of profitability, on the one hand, and of the balance indicators, on the other hand. The research results confirm the hypothesis that the profitability and economic balance are inseparable components of performance and shows us that a good performance requires a high profit and positive cash-flow, guaranteeing economic balance.

Keywords

• profit
• cash flow
• performance
• added value
• economic balance