EBITDA is Fantasy
Revenue is Vanity
Income is Sanity
Cash Flow is King!

Not sure who originally came up with that quote, but they were 100% correct. All too often the focus is on sales or revenue with no thought given to cash flow. Or the implications of “we want to grow 20% this year.” You cannot grow without positive cash flow. You will not survive without cash flow. Cash is it. Period. All too often owners and managers like to throw around sales. My company is $1 or $10 or $50 million in sales. Good for them. Do they have net income that comes from that and the corresponding cash flows? Is the top number the only one they look at and are stressed because they have no cash in the bank. But sales are great! Would you be better off with lower sales, higher gross profits (and net profits) and higher cash flow and bank balances? And probably less effort and stress for your team too. Of course you would. The aim of these posts going forward is to help you understand the importance of cash and cash management for all aspects of your business. You have worked hard for your cash and we want you to keep it!