Cashflow and income (aka profit & loss) are different beasts. You can be very profitable and run out of cash and it's possible to be flush with cash yet post a

Cashflow and income (aka profit & loss) are different beasts. You can be very profitable and run out of cash and it's possible to be flush with cash yet post a loss. In the near term, cash is what matters. If you run out of cash, the company is bankrupt. For a "normal" big company, which is approximately profitable, it's fine to have much less cash-on-hand, because you will have established lines of credit and easy access to the financial markets if you need more. Much more importantly: you have a lot of cash coming through the door, approximately enough to cover cash going out the door. This varies by business: some naturally have very lumpy cashflow (eg mining) and others have very smooth cashflow (eg breweries). A lot of what CFOs do is manage this cashflow. For corporate health, it needs to be smooth, which means at any given time some cash is being received, some is going out, some is being banked and invested in short-term instruments and some is being borrowed. Some haggling with suppliers and customers about payment dates is also normal, because cash delayed or brought forward is cash made or lost. On the other hand, if you are not operating profitably, you will need regular infusions of cash to keep operating. You actually need a lot more cash and cash-equivalents on hand than the profitable business does, because it takes you longer to get cash in the first place. A line of credit is more or less instant, short term cash can be arranged in a day and so on. But selling bonds takes time, up to months. Selling shares takes time, up to months. You need cash to cover a cash supply delay that a profitable business doesn't need. That's Tesla's problem. They have enough cash for a few quarters and it is not replenishing fast enough from sales income or deposits. They will need to raise money and the longer they delay, the more punitive the terms will be.