Profit was up 40%. The overdraft was fuller in December than in January.

Rising profit alongside tightening cash is not a contradiction: it is the normal signature of growth, and it has a calculable ceiling.

By Steve 5 min read
Abstract bridge artwork for Profit was up 40%. The overdraft was fuller in December than in January.

A business finishes the year with profit up sharply, a fuller order book and a longer customer list. It also finishes the year closer to its facility limit than it started. Nothing has gone wrong. No customer has defaulted, no fraud has occurred, no line has been mispriced. The two facts sit together because growth consumes cash, and the profit and loss account is not designed to say so. The interesting question is not why this happens. It is how much growth a given balance sheet can fund without outside…

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Important: General information only. Rialto Bridge articles describe patterns and considerations that may apply to a business; they are not financial, legal, tax or accounting advice, and they take no account of your particular circumstances. Consider your own situation and seek advice from a qualified professional before acting.

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