[jacques_chester]

Yep. When you're out of cash, the game is up, no matter what the P&L says.

A different way to look at it is this: cashflow tells you the health of the company right now, P&L in the long run. You need to watch both.

For example, you've booked $100 million of sales for the period. According to the P&L you're profitable by $20 million. A bill arrives from a supplier for $10 million.

But supposing you only had $5 million cash on hand. Unless those customers begin paying you money for the booked sales, you are in trouble. Time to take corrective action.

Likewise. Consider that you're in a business where customers pay on purchase (most retail industries). Your cashflow might be excellent in that you have plenty moving across your books. However costs are rising and you are making a loss on the P&L. Eventually this will deplete your cash and you will be out of business. Time to take corrective action.

Used properly, P&Ls and cashflows are a monitoring tool, a kind of standard Nagios/munin/zenoss for your business.