If the net cash flow generated by operating activities is less than Xiaoyu's net profit, there are two possibilities:
1, the main reason should be that enterprises have more accounts receivable, that is, the operating income of enterprises is mostly credit sales income, which can be tested by the turnover rate of accounts receivable (operating income/accounts receivable). If the turnover rate of accounts receivable is low, it proves that accounts receivable account for a large proportion of operating income, which may prove that enterprises have certain problems in account management or are in a relatively weak position in the transaction. Of course, it is not an absolute bad thing, because it depends on the nature of the enterprise, because if it is a fast-selling industry or online sales, there may be more accounts receivable, and the existence of accounts receivable may also prove that your relationship with customers is better. Of course, enterprises should pay attention to the management of accounts receivable, because too many accounts receivable will easily lead to bad debts, that is, they will never be collected. This will cause losses to the enterprise.
2. The main profit structure of the company does not come from business activities, but may come from investment activities or even fund-raising activities. This may be biased, because it is actually not good for an enterprise, because the profit income of an enterprise depends on its business activities to be conducive to the long-term stable development of the company. However, some companies may adjust their final net profit through other business income or non-business income when their profits are not good in that year, but they actually realize it by selling assets (investment activities), that is, the company's business is not as good as the net profit shown in the statements.