Profit and cash answer different questions. You can make a profit while customers still owe you money, while you are buying stock, repaying borrowing, paying tax from an earlier period or investing in equipment.
Common places the cash went
- customers have not paid yet;
- stock or work in progress absorbed cash;
- loan capital repayments use cash but are not the same as an expense;
- tax is being paid after the profit was earned;
- the owner took drawings/dividends;
- equipment or deposits used cash.