Because of several potential factors. First, there are expenses like Depreciation and Amortization that aren't cash expenses. They're a way of spreading the expense of a fixed asset over the life of that asset, so you don't get whammied the year you buy a big piece of machinery. Second, if you're an accrual-basis company, expenses are recorded when the revenue is recognized, not when the expense is paid. So technically, even though you paid a bill from your supplier this month, if you sold your product last month, the expense should have been on the previous month's Income Statement, which produces Net Income. The cash flow, which is reflected on the Statement of Cash Flow, would not be affected by your payment of the bill until this month.