Revenue Is Not Cash
Explain why booked revenue can increase while operating cash flow gets worse.
A booked deal cannot pay payroll until the cash arrives. Revenue is a period measure The P&L records earned revenue and expenses so you can judge performance. That is why a month can show strong revenue even when invoices are still unpaid. Cash is a timing measure The cash flow statement follows collections and payments. Receivables, inventory, payables, prepaid expenses, and debt payments can all move cash differently from profit. Unit economics decide how painful the wait is If contribution margin is high and payback is short, the business can usually finance the timing gap. If contribution is weak, growth…
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