Revenue Is Vanity Profit Is Sanity And Cash Is Reality

In category management consulting.

Revenue is vanity profit is sanity and cash is reality. We now know it s great to have new sales but unless they are profitable sales you would be unlikely to stay in business for long. An interview with experienced cfo simon ashley simon ashley is a chartered accountant who started out as an auditor at big 4 firms kpmg and pwc before moving into industry. Revenue is vanity profit is sanity cash is reality. The saying is now starting to make more sense.

John mullins a little known fact is that at the dawn and early growth of the u s. So many companies that we see have in this post recessionary period continued to survive while others thrive. Revenue is vanity profit is sanity cash is reality 0. Turnover is known by a few names.

Published on september 21 2015 september 21 2015 142 likes 17 comments. Turnover is vanity is about your ego profit is sanity is about the reason you re most likely in business and cash is reality is what keeps the doors open. Turnover is vanity profit is sanity but cash is reality. Profit is essentially what is left after all expenses have been accounted for.

Why profit and cash flow are not the same thing business owners think in profits but of course spend in cash. Cash flow is reality by. Posted on 15 may 2013. But it is cash that is reality.

Profit is a much better indicator of a company s health than revenue and it is regularly used to gauge the value of a company particularly for stable mature ones. It s the amount of money a business makes before subtracting any expenses. Valuable lessons for sme leaders. Along the same lines as anybody who s run a business knows cash flow is everything or cash flow is king but it s doubtful that on.

The next commonly used figure is that of profit. Here is an example that. Cash in this scenario doesn t mean notes or coins but money in the bank that you can spend at any time. It s a great line but like many of the best quotes it s origins are probably lost to the winds of time.

Turnover is vanity profit is sanity. So while obviously important to grow customers and sales chasing revenue at the cost of all else is vanity and a potentially fatal blunder. No truer words have been spoken. I know companies with 50 million in sales who at the same time carry 5 million in debt and make annual profits of 100k.