July 23, 2025 / By The Financial Poise Editors
Making Metrics Matter: A Plain-English Guide to Cash Flow KPIs
A company’s financial health is more comprehensive than a single profit chart; it necessitates a deep dive into cash flow and the key performance indicators (KPIs) that influence it. This guide aims to demystify cash flow modeling and projections, providing clarity on the metrics that matter most.
Cash Flow: The Lifeblood of Business
Forget profits for a second — cash flow is often the more important indicator. While profit margins are important, cash flow is often a more critical indicator of a company’s financial stability.
Ken Yager, President of Newpoint Advisors Corporation, explains that profit is an accounting construct, but cash flow is the real thing.
Companies live or die by their ability to maintain liquidity. Cash flow represents the actual movement of money in and out of a business, affecting its ability to meet obligations like payroll, vendor payments, and debt servicing.