Education . Corporate Finance . 3 of 3
RupeeCase
Profit says the sale was worth it. The cycle says when the cash lands.
01
Profit and cash are not the same clock. A company can book a great quarter and still be short of money, because the sale is on the books long before the customer actually pays.
02
A negative cycle is a free loan from your own suppliers and customers. It funds growth with no debt and no fresh shares. That is why some of the steadiest compounders barely borrow at all.
03
Watch the cycle stretching. Collection days creeping up year after year is a company quietly financing its own customers, and it usually shows there long before earnings crack.
Two firms can earn the same rupee of profit. The one that collects it first and pays it last is the one that never has to call the bank to grow.
Read a balance sheet like the cash depends on it
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