I could not believe it. Not more than one day of cash. My heart sank to my stomach. I double checked. Still in disbelief. Yes, I confirmed with myself for the third time, not more than one day of cash.
What I described above is incredibly scary and a harsh reality. There I was working with a new client, a business that had been in business for more than 50 years. They had more than 100 Million dollars in revenue per year, and as I looked at their statement of cash flows and their daily inflows and outflows, I realized…they were literally operating day to day on cash! Meaning, if something were to go wrong with the bank and they were to not receive the businesses daily deposit, the company would not be able to pay their bills, they would overdraft their account.
How can a company that earned so much every year and been in business for so many years not have more cash on hand than that? It was unbelievable to me. Do you know how much excess cash your business has?
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