Most small business owners I speak to make the same mistake.
They look at their profit number — and smile.
They should be looking at their cash flow — and asking questions.
📖 The Story
Imagine Metro Supply Co. — a small trading business in Dallas. March was a great month. They sold $80,000 worth of goods. After all costs — they made $24,000 net profit.
The owner was thrilled.
But here's what he missed:
Only $15,000 actually came into his bank. The rest? Sitting with customers who haven't paid yet.
He almost bought $18,000 equipment — with money he didn't have. And almost missed his IRS payment — which would have triggered penalties.
One Wrong Decision. Three Financial Problems.
- Overestimated available cash
- Risked a costly equipment purchase
- Nearly missed a tax deadline
💡 The Lesson
The three financial statements — P&L, Balance Sheet, and Cash Flow — exist for exactly this reason. Each one tells you a different part of the story.
"Reading only one is like driving with one eye closed."
🔍 Key Takeaway
Every business owner should be asking three questions every month:
- Where is my profit actually sitting right now?
- How much do I owe — and when is it due?
- Can I afford my next move, or am I spending on paper gains?
Because in business — the numbers don't lie. But they do hide.
Your job is to find what's hiding.
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Share on LinkedInAbdul Aziz Fuzail Mohammed
Accounting Specialist · CPA Candidate
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