Margin vs Cash Flow: Navigating Financial Reality

Ghislain Fabrice SANOU
Margin vs Cash Flow
Navigating Financial Reality
Strategic Finance & Data Architect | FMVA®, CBCA®,
CMSA®, BIDA®, PMP® | Trade Finance Consultant Euro
Exim Bank | OHADA/IFRS |
BI & Governance Specialist

CONTENT
Margin vs Cash Reality
01 Cash Conversion Ratio 02
Executive Dashboard Integration
03

Margin vs Cash Reality
01

Accounting Illusion
Impressive on
Paper
Companies can show high
profit margins while facing
acute financial distress due to
non-monetary accounting
elements.
Theoretical
Performance
Margins reflect calculated
performance including
depreciation, provisions, and
deferred income that may
mask operational reality.
Hidden
Vulnerabilities
Financial directors must
decode numerical illusions
and expose weaknesses
concealed behind flattering
margins.
Cash Reality
Liquidity ultimately
determines operational
survival despite attractive
accounting figures showing
theoretical profitability.

Operational Truth
Cash Never Lies
Represents company's real ability to meet commitments,
invest in growth, and withstand economic shocks.
Judge of Viability
Cash flow determines business model sustainability even
when financial statements show profitability on paper.
Liquidity is Queen
Modern economy prioritizes cash management over
accounting metrics for true operational resilience.
Survival Factor
Cash shortage can bankrupt even "profitable" companies
when theoretical margins don't translate to available funds.