I have never met a CEO who could read a statement of cash flow.

What a shame!

Why? Because if a business that is either 1) growing rapidly or (2) shrinking or downsizing or (3) stable but planning for (1) or worrying about (2), that report is at least as important as the income statement.

If you want to know why your calculated profit didn’t make it into your bank account, or why your income statement shows a profit but you have an overdrawn bank account to show for it, where else can you quickly get the answers? Only one place: the statement of cash flow.

If you’re one of those who can’t read – and therefore doesn’t even ask for – that particular report page from your CFO/Controller, you are making a BIG mistake. If you don’t want to ask them how to read it, ask a friend, ask your banker, ask your priest or minister. Heck, ask ME. But ask someone. Before it’s too late. You can’t afford to be non-financial in this area, so get over it.

As always, I welcome your comments.