4 ms·

So as I understand you play these games with cash flow but ultimately the objective eventually is to still turn that into profit. After you've grown your compan

by golol 2y ago

So as I understand you play these games with cash flow but ultimately the objective eventually is to still turn that into profit. After you've grown your company for several decades at aome point you stop growing and you start milking it. Similarly you want to accumulate float as a restaurant to prepay your suppliers to get better prices and hence more profit.

spydum 2y ago
Actually,I don't think you ever need to be profitable, as long as you are cash flow positive, there isn't really a reason to stop the merry-go-round. It sounds weird, but if every month you collect more cash, and you pile it into future investments/raw materials, it just turns into more cash flow later.
- deleted 2y ago
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- yuliyp 2y ago
  Huh? The ways to be cash flow positive but unprofitable are borrowing/investors putting money in, depreciation adjustments, or growing accounts payable. All of which eventually stop.
jdmoreira 2y ago
Not necessarily. You can just sell it and get paid. Either selling it in the public markets or private to a PE firm or someone else
- golol 2y ago
  But at some point after the company has been sold again and again someone will want to actually make money off of that. At aome point the wheel gets turned around and this huge investment should be milked. Otherwise it doesn't make sense. Yea you sell the company and are out of the game but from the bigger view profit is still the eventual purpose of the company, it must be right?