Money orders are great but the possible delay of receiving that money can really cripple your operating costs. You could have a bunch of orders but the delay of actually acquiring the money could freeze or cause your successful business to go bankrupt.
An insight into the accounting world was when the article discussed reinterpreting your balance sheet to change expenses into future investment, therefore on paper producing excellent profits. That trick can really misguide or deceive the people reading the reports to think they are doing better. The cash flow is key but that doesn't prove your worth.
I think is it quite weird that a company could have zero dollars in hand but be worth millions of dollars. The representation of equity and value of a companies product is nice to represent what the company is really worth compared to how much cash the business has at any said time.
An interesting discussion point is how dangerous is it to look good on paper. If you skew your balance sheet to remove expense as future investment, you look better on paper and possibly bid more confidence from investors and new investors. In that regard, isn't it more beneficial to look better on paper for the sake of reaping the benefits and confidence that could carry you over the dangerous humps of misreported finances than report matter of fact-like? Or is that how the big corporate failures start, with opinionated books?
P.S. On a side note I have stumbled across / have been reinforced a curse about discounts, price slashing, etc. If your product is valued at 100$ and have 1000 items, you in effect have a company worth 100,000$. If you begin a price war or have a necessary price reduction to attract more customers, when you begin selling the units for 85$, your company just lost 15% of its value. If I have this concept correct, your equity would be sacrificed all for the sake of acquiring new customers. Is that really worth it?
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