Lets say I had $1m in the bank beginning of Q4. My expenses were $5m. I sold $40m if licenses in Q1 paid up front and booking the revs ratably over the year, so I book $10m as revenue in Q4.
In Q4 I sold nothing to anybody anywhere, simply $5m in expenses. My GL is +5m (recognizing 10m from the big deal in Q1, but not getting a penny, against Q expenses of $5m), but cash as started at $1m and I paid $5m in rents and salaries, and didn’t take in a penny. Cash -$4m.
If I had added the gain(loss) the answer would be cash +6m.
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