Let's say I was your business partner or an investor in your business. But I am not involved in the day-to-day operations.
I mention to you that I noticed we showed a profit of $100,000 last month but our cash balance actually went down by $60,000. So I ask you to update me on our cash flow for last month. I ask "What happened to the cash last month"?
Could you answer that question (in a fairly big picture fashion) in a 2-minute conversation?
If you can, then you understand your cash flow. If you can't, then you don't really know what happened to the cash last month. That's scary… really scary!
Happy Halloween J
My post here about the Cash Flow Focus Report will help you fix the problem (if you're not sure what happened to your cash last month).
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