Business owners often feel frustrated when their P&L shows strong profits but there’s little cash in the bank. This disconnect isn’t incompetence or unfairness – it’s a misunderstanding of how cash really flows through a growing business. In this fifth summer series episode, Andres Zylberberg, Richard Peake and I discuss how profit and cash are not the same.

Growth itself consumes cash through working capital tied up in inventory, labour, receivables, and timing differences. Relying only on the P&L creates a false sense of security, a “mirage” of sustainability. The real insight comes from understanding cashflow statements, balance sheets, and the cash conversion cycle. With clear management reporting and a customer-funded business model, owners can see where cash is absorbed, regain control, and make smarter decisions that turn paper profits into real, usable cash.

Takeaways

• Profit on paper does not guarantee cash sitting safely in your bank.
• Revenue growth often consumes cash faster than most business owners realise.
• Relying only on the P&L creates a dangerous illusion of financial success.
• Cashflow statements reveal where profitable businesses actually lose usable cash.
• Working capital quietly bridges the gap between profit figures and cash.
• Fast growth without cash discipline can turn businesses into cash vacuums.
• Shortening the cash conversion cycle releases trapped cash for growth.
• Clear management reporting gives leaders control, confidence, and better decisions.

Watch the episode on YouTube: https://www.youtube.com/@TheEvolutionPartners

Newsletter – each week I share interesting insights, articles and ideas you can use. Join other leaders and subscribe to The Evolution Partners newsletter https://evolutionpartners.com.au/subscribe/

Books – Learn more about our books https://evolutionpartners.com.au/books/

Made to Thrive: The practical, prescriptive guide on how to be a great CEO
Onboarded: How to bring new hires to the points where they are more effective faster. A business case for leaders on why you should commit to an effective onboarded process.
Onboarded for Managers: Helping managers bring new hires to the point where they are more effective faster.
Bigger isn’t Better, Better is Better: Avoiding the pressure of endless growth to build a better business (and better life)

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