Profit vs. Positive Cash Flow
APRIL 15, 2019
They’re obsessively concerned that their sales growth will be too low to generate enough cash to pay the bills. However, if you truly understand accounting and the relationship between the cash flow statement versus the profit and loss statement, it is totally possible to go bankrupt by growing too fast. When revenue is collected, that’s called positive cash flow. In every McKinsey engagement, there’s a moment when the senior client says to us, “Hmm.