I had a long debate with an accountant, regarding what I should primarily manage. Being bootstrapped I mostly manage cash-flow and made the mistake of saying “profit is made up”. That got him real worked up.
My point was we derive profit. The actual transactions are in the cash-flow statement which does not lie.
You can hang on to a lot of cash while making lots of promises, and bankrupt a company without spending a penny.
I know you know, but it's a real problem with a lot of small operations getting their accounts done; they think they're in the black due to a bank balance, but when the accountant sees the books, things aren't so rosy.
Under GAAP, profitability for complex businesses can be highly subjective. In some cases it may only become clear in retrospect after many years whether the business was really profitable or not.