Financial performance
Financial performance is a company's ability to convert revenue into cash, profit, and a reliable picture of its own condition. It includes margins, working capital, reporting quality, and the discipline of forecasts that management actually uses.
Why does my business always have cash flow problems?
Cash flow problems persist when collections lag, inventory or work-in-process absorbs cash, vendors are paid faster than customers pay, and growth is funded from the checking account rather than from a planned working-capital cycle.
A $10 million company with no cash is not a mystery. It is a working-capital problem wearing a growth story.
We separate the economics of the business from the accounting of the business. Contribution margin, cash conversion, customer terms, and the lag between booking and collecting are usually more important than another version of the monthly P&L.
Better financial performance gives the owner options: to invest, to hire, to step back, or to sell. Weak financial performance turns every decision into a short-term cash decision.
Signs this work is needed
- Profitable months still feel tight
- The owner is the collections department
- Nobody trusts the numbers until they are two weeks old
- Growth requires the owner to put more money in
Why does my business always have cash flow problems?
Cash flow problems persist when collections lag, inventory or work-in-process absorbs cash, vendors are paid faster than customers pay, and growth is funded from the checking account rather than from a planned working-capital cycle.
Who is financial performance for?
Owner-led and founder-led U.S. companies that want the business to perform better and depend less on the owner.
