Speculative · Finance Theory · Infographic

Revenue, Profit, and Cash Are Not the Same Number

Nathan Liao, CMA · 2026

"Revenue, profit, and cash measure three different things at three different points in a transaction's lifecycle, and conflating them is the single most common misconception in reading a business's financial health."

The idea

A $500 bag sale can simultaneously mean $500 in revenue, $50 in profit, and a $40 increase in cash — three true numbers from one transaction, each answering a different question.

Why it works

The takeaway — recall it first

EBITDA, Decomposed

"EBITDA strips out financing structure, tax jurisdiction, and accounting depreciation choices to expose a company's core operating performance — which makes it useful for comparing companies fairly, but only if you separately track the real cash flow and capital expense risks it deliberately ignores."

Abir Haddoud · InfographicContinue→