Why Cash Flow Matters More Than Earnings

One of the biggest mistakes investors make is treating earnings as the final word on a company’s health, when in reality cash flow often gives a clearer picture of whether the business is actually generating money, funding itself, and surviving without relying on constant external support. Earnings still matter, but they do not always reflect what is happening beneath the surface.

This distinction matters everywhere. It matters even more in small caps. It matters in growth stocks, miners, and capital intensive businesses where reported profits can look respectable on paper while the underlying cash position tells a very different. . .