My business is in profit but where did the cash go?

There are a number of reasons why a company may be profitable but has no liquid (cash) assets.

• money could be invested in high levels of stock and work-in-progress


• turnover may be high but customers may be slow to pay


• early payment of liabilities


• investment in fixed assets such as buildings or plant and machinery


• seasonal variations in the business cycle resulting in high sales in one period and a lull in others


• poor cashflow can be an indication that the company is overtrading - but you'll have to call us in to explain that one!