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Some businesses look at profit margin but forget to look at their cash flow to ensure the business is generating cash: that is cash in v’s cash out = cash margin.

A new business will generate most of its cash margin from sales (P&L) but an old business can also generate cash from it balance sheet by selling off under-utilised assets.

Also many businesses will generate good profits but in the very short term, 1-3 months, will not have enough cash to pay the bills.