GROSS PROFIT METHOD Definition

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GROSS PROFIT METHOD is an inventory estimate based on gross margin.

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ON ACCOUNT is a partial payment made towards satisfaction of a debt.

CASH FLOW is earnings before depreciation and amortization. Cash flow is calculated as the difference between cash inflows and outflows. Cash flow can be derived from Operating Profit by adjusting for items which do not affect payments (e.g. depreciation) and items (e.g. changes in working capital) which affect payments but are not recorded in Operating Profit.

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