Managing for Net Cash Flow vs Net Profit
Most businesses we have looked at were managed to maximize net profit, which is typically a good thing. But, when trying to attract an acquirer, they really should have been managed to maximize net cash flow. As at the end of the day, that's really what matters most to investors -- getting visibility into a near-term return of their invested capital, that hopefully can pay back in 12-18 months, not 4-5 years. Let me explain further.
September 25, 2018