POLARIS

Finance · Problem brief

Revenue Is Up but Cash Is Down

DIRECT ANSWERRevenue and cash move on different clocks. Reconcile operating cash to the ledger, bridge the period through receivables, inventory, payables, capital spending, financing and one-time items, then separate expected growth investment from deterioration. Test one recoverable working-capital action and protect revenue, supply continuity and accounting control.

Updated September 28, 2026Diagnosis · Evidence · First proof

Start with these five checks.

Ask for only what can change the answer.

Test one reversible move.

Choose one closed period and reproduce the cash bridge. Apply one bounded action to a named cohort—for example dispute triage for overdue invoices or a reorder change for aging inventory—and estimate timing, probability and side effects. Move to a live pilot only if the calculation reconciles and guardrails remain intact.

A decision your team can use.

Common questions.

Can EBITDA explain this?

No. Accrual profit does not show when customers pay, inventory converts or suppliers are paid.

Should all inventory reduction count as cash opportunity?

No. Reserved, required, obsolete and hard-to-liquidate stock need separate treatment.

What is the first control?

Reconciliation. An operational explanation built on unreconciled extracts is not decision-ready.

Authoritative references.

  1. U.S. SEC, Beginners’ Guide to Financial Statements
  2. Federal Reserve, Financial Accounts of the United States

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