Do you think that cash flow is more important than profits when it comes to a company's success?

Cynthia49

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Sep 22, 2022
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For me, yes. Cash flow is more important than profits when it comes to a company's success. It's all about how you use your money: do you spend it on the things that matter most to you, or do you hoard it and miss out on opportunities?

If you're thinking about what makes for a successful company, I think cash flow is a better indicator than any other financial metric because it tells you how much money is coming in and going out. If something like profit margin is all you look at when assessing your financial health, then you'll never get an accurate picture of whether or not your business is thriving.

As an example of this point in action, look at companies like Amazon and Tesla. Both companies have made big bets on future technologies (e-commerce and electric cars), but they've also been extremely aggressive about spending their profits right now on research and development efforts that will pay off big time in the future. Both companies have reported losses in recent years because they know that their investments today will be worth it down the road when they have new products ready for release.