Why cash flow matters

Here’s a simple description of why cash flow is the most important financial measurement in business.

Cashflow positive means: More ‘actual’ cash money is coming in than is going out. It does not mean revenue exceeds expenditure.

Hence:

It’s impossible to go broke while your business is cash flow positive.

It’s possible to broke while your business is making a profit.

This is the most important financial fact startups must know and understand.

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