If you own a business and have subscriber to Think Daily for some time, do you measure your “Spread”. You should.
It’s cash + receivables – payables.
Measure it the same time each month, and keep a chart of the four numbers. It’s is very helpful in making decisions about money and the timing of your decisions – including making investments, borrowing money, and taking distributions.
My Spread charts go back many years and along with my financials it helps me fully understand how my company is performing.