Bob GauvreauAsk Bob Gauvreau Questions Based On His Training

Low Cash Doesn't Mean Low Profit.

11 Sept 2026 · 1 min

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Bob Gauvreau explains why a business can show healthy profit on paper but have almost no cash in the bank. The gap happens because cash gets spent on inventory, equipment, and other costs during the period. Owners who miss this distinction often underestimate their tax bills and run into cash-flow problems.

Chapters

So if you asked a business owner about the last time a number caught them off guard, what do you think would have gone wrong for this to happen? So if a business owner got caught off guard with a number, it would be that they're unexpectedly thinking their profit is lower because they have no cash. So sometimes we see this with business owners. We tell them this is their net income, this is what the business made, and they're shocked because there's no money left in the bank account. So what would've happened is they would've spent their cash in some way and understated how much their income actually was in their business, meaning that there's more tax and less funds able to repay or to pay those taxes.