Direct vs. Indirect Cash Flow: Which Method Fits Your Business?
You can be profitable on paper and still be short on cash. That gap is why every scaling CEO needs to understand the cash flow statement and the two ways to build it: the direct method and the indirect method. Here's how each works and when to use which. Want a clean structure to build from? Grab our Cash Flow Statement Template. Why Cash Isn't the Same as Profit A healthy net income doesn't guarantee cash in the bank. Accounts receivable, inventory, and the timing of payments all move cash independently of profit, which is how a profitable company runs
