Cash Flow Summary
From: www.linkedin.com (Oana Labes)
Most CEOs focus on the P&L.
That’s a big mistake.
A company can be profitable today and still fail to scale, attract investors, or create long-term shareholder value.
Why?
Because CEOs focus on earnings instead of cash flow strategy.
Without a plan to generate, allocate, and invest cash, you risk:
↳ Chasing revenue instead of high-ROI investments
↳ Wasting capital on low-impact initiatives
↳ Carrying debt that weakens financial flexibility
↳ Failing to attract the right capital at the right time
↳ Missing opportunities to scale sustainably
📌That’s why the Cash Flow Statement is the most important financial report in your business.
Here’s how it actually works—and how to master it.
1. Operating Activities = The Cash Engine
This is the heartbeat of your business—where cash is created or destroyed in daily operations.
Where cash comes from:
↳ Sales collected in cash
↳ Payments received on past receivables
↳ Interest and dividends received
Where cash goes:
↳ Payments to suppliers and employees
↳ Interest on debt
↳ Taxes
How to master it:
↳ Optimize your cash conversion cycle.
↳ Use sensitivity analysis to stress-test your plans.
2. Investing Activities = The Growth Playbook
This is where strategy meets execution—how you deploy cash to drive enterprise value.
Where cash comes from:
↳ Selling equipment or investments
↳ Loan repayments from others
Where cash goes:
↳ Buying property, equipment, or investments
↳ Lending cash to others
How to master it:
↳ Prioritize investments using NPV and IRR.
↳ Align investments with sustainable operating cash flow growth
3. Financing Activities = The Capital Structure
This determines how you fund your expansion—through debt or equity.
Where cash comes from:
↳ Issuing stock
↳ Taking on new debt
Where cash goes:
↳ Paying dividends
↳ Buying back stock
↳ Paying off debt
How to master it:
↳ Optimize your capital structure.
↳ Align dividend and stock repurchase policies.
The Takeaway:
Most CEOs focus on profit first.
But real financial intelligence starts with cash flow strategy.
Because the businesses that win aren’t just profitable—
They leverage their cash to maximize enterprise value.
