When cash (flow) is still king
MANY retail investors doing their investment homework are often impressed by a company's strong revenue and profit track record, not realising the peril that a seemingly healthy, profitable business can also go bust in a short period of time.
Strong revenues and earnings and yet ending wound up - isn't this an irony? Not really if one bears in mind that financial performance is not measured just by the income statement (also referred to as the profit and loss statement) and the balance sheet. Equally important, but often overlooked, is the cash-flow statement.
The biggest bugbear for companies - including the profitable ones - is poor and negative cash flows. Not taking heed of the early warning signs is to invite disaster.
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Companies & Markets
Cordlife directors offer differing views on future oversight if board is rejigged
Tesla lays off more staff in software, service teams, Electrek reports
Robinhood Crypto gets Wells notice from US SEC
Morgan Stanley strategists see inflation as key for path of US stocks
US: Wall Street opens higher as rate-cut hopes linger
Tyson raises outlook as lower costs boost chicken segment