I always thought that profit was the most important sign of a company’s success. But now I understand why cash flow might matter even more. A company can be profitable on paper and still fail if it doesn’t have enough cash to pay employees, suppliers, or bills on time. Cash flow shows whether money is actually moving in and out of the business in a sustainable way.

For startups or small companies, this is especially critical because they usually don’t have large reserves to fall back on. I think managing cash flow well is a sign of strong leadership and realistic planning. It keeps the company stable while it grows.

Do you think most businesses fail because they don’t make enough profit, or because they fail to manage their cash flow effectively?