Read if you can understand

Quote the Banker "Watch Cash Flow"

Once upon a midnight dreary as I pondered weak and weary
Over many a quaint and curious volume of accounting lore
Seeking gimmicks (without scruple) to squeeze through some new tax loophole
Suddenly I heard a knock upon my door
Only this, and nothing more

Then I felt a queasy tingling and I heard the cash a-jingling
As a fearsome banker entered whom I'd often seen before
His face was money-green and in his eyes there could be seen
Dollar-signs that seems to glitter as he reckoned up the score
"Cash flow," the banker said, and nothing more

I had always thought it fine to show a jet black bottom line
But the banker sounded a resounding, "No.
Your receivables are high, mounting upward toward the sky;
Write-offs loom. What matters is cash flow."
He repeated, "watch cash flow"

Then I tried to tell the story of our lovely inventory
Which, though large, is full of most delightful stuff.
But the banker saw its growth, and with a mighty oath
He waved his arms and shouted, "Stop! Enough!
Pay the Interest, and don't give me guff"

Next I looked for noncash items which could ad infinitum
To replace the ever-outward flow of cash,
But to keep my statement black I'd held depreciation back,
And my banker said I'd done something rash.
He quivered, and his teeth begin to gnash.

When I asked him for a loan, he responded, with a groan,
That the interest rate would be just prime plus eight,
And to guarantee my purity he's insist on some security -
All my assets plus the scalp upon my pate.
Only this, a standard rate.

Though my bottom line is black, I am flat upon my back
My cash flows out and customers pay slow
The growth of my receivables is almost unbelievable;
The result i certain - unremitting woe!
And I hear the banker utter an ominous low mutter,
"Watch cash flow."

By Herbert S. Bailey Jr.


What a wonderful (and nerdy) poem of an accounting story!