Cash flow > net income

Net income isn't what pays the bills, scales your company, accumulates, wealth or pays you while you're not working.

For instance, when a business owner goes to purchase real estate, lenders often want to see 2 years of tax returns and they will make adjustments for depreciation and amortization (noncash expenses) because they want to understand your cash flow to ensure that you're going to be able to cover payments.

Need financing to expand your company? Lenders will want full financials - not just the income statement because they want to understand where all your cash is going.

If cash flow sounds foreign to you, time to study up.