Cash - not profit - are king what does it mean, and why it's important?

if we assume cash is more important from profit , do investors follow this rule, do financial sites with stock and investing information follow this principle?

Cash - not profit - are king what does it mean, and why it%26#039;s important?exchange rate

This means that cash on hand is important. You see, I can run a company pandering to investors looking for some earnings per share etc while running a company into debt. So while I may turn huge (taxable) profit, it really is not good for my company. I will still be in debt. One notable case of a company with huge cash reserves is Bershire hathaway. Now they could easily turn a massive profit and give dividends to their holders, but instead, they try to not turn large profits, and keep cash on hand. They have 40 billion in cash, and a AAA bond rating. This allows the company to grow, and be stable.

Cash - not profit - are king what does it mean, and why it%26#039;s important? loan

I understand what you are saying, but it%26#039;s important to go further. What is important isn%26#039;t just cash, but free cash flow which is operating cash flow, less preferred dividends and capital expenditures. Free cash flow measures, in basic terms, a company%26#039;s ability to pay dividends to its shareholders. Some analysts use FCF as a tool to value companies using a multiple quite similar to EBIT and EBITDA (earnings before interest, tax, depreciation and amortization). Both FCF and EBIT/EBITDA are important measures in valuing a company.|||Cash is cash. Profit is potential cash. If you buy a stock and it appreciates in value, you have profit. But if you don%26#039;t sell it, the profit is not realised.|||I think you can grasp the menaing by answer this question yourself:

Which would you prefer, a real hard cash on hand or profit in form of numbers on a piece of paper (shown on company report)? The said profit may still be collectible ....