"Cash is king" is a well-worn phrase that has been used quite a bit over the last few years. I hate to burst the bubble, but it is not true. Cash can be king for a day, a month or maybe even a year, but eventually it will be unseated by the real king: profit.

Don't get me wrong, cash is critical. Without cash, a company can become insolvent, unable to pay its people, its bills, its other obligations. The end result could be bankruptcy. But without profit, cash will eventually be revealed as a fraud. Think Bernie Madoff. He had plenty of cash, it just wasn't his. There are many ways to have cash without profit. It could be borrowed, or from investors, or from customer deposits, or from inventory that was sold but not replaced, or from the sale of an asset.

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