Last week, I mentioned in closing that “… cash is king. A profitable business without cash will close down but a loss-maker awash with cash will continue operating.”
This remark has disturbed a number of readers and they have asked whether it is realistic to expect a profit-making business to have a shortage of cash.
Well, the answer is not only yes, but also that this is a very common state of affairs. Indeed, quite often when a business fails, we hear the senior managers talking about “cash flow challenges”. They never say that they a…