Profit is an opinion. Cash is a fact.
Business Health = Profit (Income Statement) × Asset Structure (Balance Sheet) × Cash Flow (Cash Flow Statement)
Balance Sheet: A snapshot of your assets and liabilities at a single point in time. (Strength)
Income Statement: A video of your profits and losses over a period. (Efficiency)
Cash Flow Statement: The EKG of your business — the ultimate truth. (Risk)
Core Insight: Profit ≠ Cash Flow. The shorter your cash cycle, the healthier your business.
Distributors pay upfront before Moutai even produces the liquor. It uses this free cash to expand — a beautiful, self-funding cycle where every dollar of profit is more than a dollar of real cash.
Borrowed massively → bought land → sold apartments via pre-sales → used pre-sale cash to buy more land while paying interest. When financing dried up, the entire cycle collapsed instantly.