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TryOwning · Foundations · Concept 5
Ticket 1 of 10, 0 done

Cash flow · 14 min

Profitable and still broke?

A business can make a profit every month and still run out of money. It's all about when the money moves.

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Ticket 01 · Warm-upTable 1

Warm-up: a half-empty hotel

A quick one from the last lesson. A hotel is half empty on weeknights and sold out every weekend, turning guests away. Which price moves fit what you learned?

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      Sources and every number (3 sources)

      Sources

      • EMCOR Group, Inc. Form 10-K for the fiscal year ended December 31, 2025 · EMCOR Group, Inc. (filed with the U.S. SEC), 2025
      • 2026 Report on Employer Firms: Findings from the 2025 Small Business Credit Survey · Federal Reserve Banks, 2025
      • Planet Fitness, Inc. Form 10-K for the fiscal year ended December 31, 2025 · Planet Fitness, Inc. (filed with the U.S. SEC), 2025

      Every number

      • $17Bsec.gov ·2025 · EMCOR's revenues, fiscal 2025.
      • $4.2Bsec.gov ·2025 · Accounts receivable, net, at the end of fiscal 2025.
      • 91 dayssec.gov ·2025 · Worked out from the annual report: accounts receivable divided by the year's revenue, times the days in a year. A year-end snapshot.
      • $944.5Msec.gov ·2025 · Retainage included in accounts receivable at the end of fiscal 2025: billed, but held back until projects are finished.
      • $2.3Bsec.gov ·2025 · Contract liabilities, current, at the end of fiscal 2025: billed to clients ahead of the work done so far.
      • 90%sec.gov ·2025 · The share of that retainage EMCOR expects to collect during the next year.
      • 50%fedsmallbusiness.org ·2025 · Share of small employer firms that called uneven cash flow, including collecting from customers, a financial challenge in the prior year. Federal Reserve Banks' survey of small employer firms, fielded in late 2025.
      • 54%fedsmallbusiness.org ·2025 · Share of small employer firms that had trouble paying operating expenses such as payroll, rent and inventory in the prior year. Federal Reserve Banks' survey of small employer firms, fielded in late 2025.
      • $40,000example (example number: Simplified example: one kitchen remodel at a small remodeling company, the price the client pays.) · Simplified example: one kitchen remodel at a small remodeling company, the price the client pays.
      • $20,000example (example number: Simplified example: cash in the bank before the job.) · Simplified example: cash in the bank before the job.
      • −$16,000example (example number: Simplified example: one kitchen remodel at a small remodeling company: cabinets, counters and everything else, paid when bought.) · Simplified example: one kitchen remodel at a small remodeling company: cabinets, counters and everything else, paid when bought.
      • −$12,000example (example number: Simplified example: one kitchen remodel at a small remodeling company: the crew's pay for the month of work.) · Simplified example: one kitchen remodel at a small remodeling company: the crew's pay for the month of work.
      • −$3,000example (example number: Simplified example: a month of office, van and insurance costs.) · Simplified example: a month of office, van and insurance costs.
      • −$11,000example (example number: Worked out from the example cash diary.) · Worked out from the example cash diary.
      • −$14,000example (example number: Worked out from the example cash diary.) · Worked out from the example cash diary.
      • $36,000example (example number: Simplified example: one kitchen remodel at a small remodeling company: the client's payment, with a tenth held back.) · Simplified example: one kitchen remodel at a small remodeling company: the client's payment, with a tenth held back.
      • $19,000example (example number: Worked out from the example cash diary.) · Worked out from the example cash diary.
      • $4,000example (example number: Simplified example: one kitchen remodel at a small remodeling company: the tenth held back, paid after final sign-off.) · Simplified example: one kitchen remodel at a small remodeling company: the tenth held back, paid after final sign-off.
      • $20,000example (example number: Worked out from the example cash diary.) · Worked out from the example cash diary.
      • $12,000example (example number: Simplified example: one kitchen remodel at a small remodeling company: the price minus materials and crew, before office costs.) · Simplified example: one kitchen remodel at a small remodeling company: the price minus materials and crew, before office costs.
      • $14,000example (example number: Worked out from the example cash diary: how far below zero the bank went.) · Worked out from the example cash diary: how far below zero the bank went.
      • 1example (example number: Simplified example: one new job starts each month.) · Simplified example: one new job starts each month.
      • 60 daysexample (example number: Simplified example: the client pays this long after the job ends.) · Simplified example: the client pays this long after the job ends.
      • 0%example (example number: Simplified example: no deposit at signing.) · Simplified example: no deposit at signing.
      • $20,000example (example number: Simplified example: cash in the bank at the start.) · Simplified example: cash in the bank at the start.
      • 2example (example number: Simplified example: two new jobs a month.) · Simplified example: two new jobs a month.
      • 30%example (example number: Simplified example: a deposit at signing, as a share of the price.) · Simplified example: a deposit at signing, as a share of the price.
      • 30 daysexample (example number: Simplified example: the client pays this long after the job ends.) · Simplified example: the client pays this long after the job ends.
      • $80,000example (example number: Simplified example: a renovation about twice the usual job.) · Simplified example: a renovation about twice the usual job.
      • 60 daysexample (example number: Simplified example: the developer pays this long after the work is finished.) · Simplified example: the developer pays this long after the work is finished.
      • 10%example (example number: Simplified example: the share the developer holds back until final sign-off.) · Simplified example: the share the developer holds back until final sign-off.
      • $49sec.gov ·2025 · Planet Fitness's current standard annual fee, fiscal 2025.
      • 2,000 membersexample (example number: Simplified example: a gym's members, each paying the annual fee in January.) · Simplified example: a gym's members, each paying the annual fee in January.
      • $98,000example (example number: Worked out from the example members and the cited annual fee.) · Worked out from the example members and the cited annual fee.
      • $8,167example (example number: Worked out from the example: everything collected, spread over twelve months, rounded to the dollar.) · Worked out from the example: everything collected, spread over twelve months, rounded to the dollar.
      • $89,833example (example number: Worked out from the example: collected in January but not yet earned.) · Worked out from the example: collected in January but not yet earned.
      • $58.6Msec.gov ·2025 · Deferred revenue, current, at the end of fiscal 2025: cash collected from members and franchisees for service not yet given.
      • $52,000example (example number: Simplified example: a bathroom remodel, the price the client pays.) · Simplified example: a bathroom remodel, the price the client pays.
      • $5,200example (example number: Simplified example: a bathroom remodel: the deposit paid at signing, a tenth of the price.) · Simplified example: a bathroom remodel: the deposit paid at signing, a tenth of the price.
      • $10,000example (example number: Simplified example: cash in the bank before the job starts.) · Simplified example: cash in the bank before the job starts.
      • $18,000example (example number: Simplified example: a bathroom remodel: materials, paid in the first week.) · Simplified example: a bathroom remodel: materials, paid in the first week.
      • $6,000example (example number: Simplified example: a bathroom remodel: the crew's pay for one week.) · Simplified example: a bathroom remodel: the crew's pay for one week.
      • 4 weeksexample (example number: Simplified example: a bathroom remodel: how long the job takes.) · Simplified example: a bathroom remodel: how long the job takes.
      • $24,000example (example number: Simplified example: a bathroom remodel: the crew's pay for the whole job, worked out.) · Simplified example: a bathroom remodel: the crew's pay for the whole job, worked out.
      • $42,000example (example number: Simplified example: a bathroom remodel: materials and crew, worked out.) · Simplified example: a bathroom remodel: materials and crew, worked out.
      • $15,200example (example number: Simplified example: a bathroom remodel: the cash in the bank plus the deposit, worked out.) · Simplified example: a bathroom remodel: the cash in the bank plus the deposit, worked out.
      • $26,800example (example number: Simplified example: a bathroom remodel: how far below zero the bank goes before the final payment, worked out.) · Simplified example: a bathroom remodel: how far below zero the bank goes before the final payment, worked out.
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