A wise man once said, “If your outgo exceeds your inflow, then your upkeep will be your downfall.”
That says a lot about the importance of cash flow in a person’s life. In fact, if your cash flow is healthy, it will cover a lot of sins. 🙂
A company is no different. You will find businesses that generate a lot of cash flows, even when they may not be earning profits.
I have a friend who runs a company that did not make profit for five years in a row. But my friend never missed his yearly trip to the US, and he bought a high end car every two years. His employees were also paid well.
You may wonder, “But how he did it?”
The answer is – Great cash flow.