Cash is King

Cash is king is an expression sometimes used in analysing businesses; it refers to the importance of cash flow in the overall fiscal health of the business. The phrase has sometimes appeared in Motley Fool articles and commentaries. For example, if a company has a large amount of account receivables, its balance sheet will give the appearance that the company is increasing equity, but the company can still be short on cash with which to make purchases, including paying wages to workers for labor.