Profit is an illusion, cash is the real substance.?
Use an analytical technique called NET CASH INCOME that will concentrate on cash entering and leaving the company. Try and avoid convincing yourself that net profit is an illusion simply because the expense side of the P&L contains non-cash expenses. Simply look through history and note that virtually ALL companies that fail showed bottom-line losses no matter what the make-up of the expenses were. A notable exception to this rule was the failure of the BALDWIN PIANO COMPANY, that was profitable up until the time it wasnt. The failure gave rise to the NET CASH INCOME approach to financial analytics.