What a business actually does
A business combines resources to provide something customers will pay for. Accounting records the transactions and obligations that result. Finance asks how to fund the business, how much risk it takes, and whether the expected benefits justify the resources committed. They overlap, but a precise accounting number does not settle a valuation question.
Imagine Morrow Bikes, a fictional bicycle workshop. It buys parts, rents space, employs mechanics and sells repairs. Customers receive a service; the business receives cash or a right to collect cash. Employees and suppliers must be paid. Owners receive what remains after the business meets its obligations.
Start any financial analysis with four questions: Who is the customer? What is being sold? When does the business earn the sale? When is cash collected? A subscription company, a supermarket and a bank answer these differently. The same ratio may mean different things in each business.
Follow one repair
Morrow earns $120 for a completed repair. Parts consumed cost $35 and the mechanic's labor costs $45. The repair contributes $40 toward rent, administration and profit. Calling that $40 “cash available to owners” would skip overhead, equipment purchases, taxes and the timing of collections. Calling all $120 profit would ignore the resources consumed.
Revenue measures sales earned. Expense measures resources consumed or obligations incurred in earning income under the applicable rules. Profit is revenue and other income less expenses over a period. Cash is an asset held at a point in time. Keep all four ideas separate.