The North Bay Business Journal, a publication of the New York Times, is a weekly business newspaper which covers the North Bay area of San Francisco – from the Golden Gate bridge north, including the Wine Country of Sonoma and Napa counties.

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Article published -Monday, August 3, 2009

Building a Business: Hey, I’m profitable; so why don’t I have cash?

By Lary Kirchenbauer

Businesses must focus on inventory, accounts receivables to get answer

“Only when the tide goes out do you discover who’s been swimming naked.” — Warren Buffett

Victory … Defeat. Won … Lost. Revenues … Expenses. These are well-understood concepts among business executives. Profits … Cash? Oops, sorry. That may be the biggest conundrum among business leaders: If I’m making all these profits, why don’t I have more cash? My company generated $500,000 in profits this year, and we have only $10,000 in cash. We can’t pay bonuses or contribute to benefit plans without cash – where did it all go? (more…)