the road block, page-26

Cash flow begins to be most important when a company has much debt...Depending on banking covenants,banks can demand repayment of debt at anytime! which alone can destroy a company

Study in point: STW Communications......extremely profitable every year with falling shareprice and high debt and low cash/profit converstion for 3 years

Result: Company forced to basically double shares on issue at fraction of 'real share' price....a 1.50 to $3 value share was issued for 46 cents from memory, all to satisfy impatient bank

Companies profit stayed about steady, clawed back cash conversion.......share price doubled from panic issue.......but business case will always be destroyed cause of 3 bad years of cash flow and high debt