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I’m sure they do, it’s been reported on CC many times that the self-employed and small-business owners get penalized in the FA process over this very issue. Unfortunately, the schools don’t publicize exactly how they adjust expenses, and I’m sure it varies from school to school. And I’m not saying they add back in every expense.
I’m not advocating for any particular taxing system, just trying to explain that the schools are not bound by the tax code when they calculate your income for the purpose of giving away their own money.</p>
<p>As far as my definition of cashflow - I put capital investment (which is anything depreciable) in a separate category. Cashflow to me is net income before taxes + noncash charges such as depreciation. Investments are made from the profit, which is cumulative cashflow. Not an accountant though, so I have no idea if these match the standard definitions or not.</p>