Cash flow is a key indicator of a company's financial health from "summary" of The Little Book That Builds Wealth by Pat Dorsey
Cash flow is the lifeblood of any business. It is the money that flows in and out of a company, representing the fundamental way in which a business generates its profits, pays its bills, and grows over time. A company can have all the sales in the world, but if it doesn't have cash flow, it won't survive for long. This is why understanding and analyzing a company's cash flow is crucial when evaluating its financial health. One of the key reasons why cash flow is so important is that it gives a clear picture of how much actual cash a company is generating. Profits can be easily manipulated by accounting practices, but cash flow is much harder to fake. By examining a company's cash flow, investors can see how much money is actually coming in and going out of the business, which provides a more accurate representation of its financial health. ...
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