Financial Planning, Budgeting, and Forecasting: Financial Intelligence Collection (7 Books)

14

Cash Is a Reality Check

“Companies hit the skids for all sorts of reasons,” wrote Ram Charan and Jerry Useem in Fortune in May 2002, a time when a lot of companies were hitting the skids, “but it’s one thing that ultimately kills them: they run out of cash.” Most managers are too busy worrying about income-statement measures such as EBITDA to give cash much notice. Boards of directors and outside analysts sometimes focus too heavily on the income statement or the balance sheet. But, they noted, there is one investor who watches cash closely: Warren Buffett. The reason? “He knows cash is hard to fudge.” ¹

Warren Buffett may be the single ...