It’s kind of wild — I used to think that if a business was profitable, everything was fine financially. But a few months ago, I helped a friend with his small business. Sales were up, profit looked good on paper, but he still couldn’t cover basic expenses. Turns out, most of the cash was tied up in inventory and unpaid invoices. So he was profitable, but broke. I get the idea a little, but can someone explain how exactly this works? How does profit not equal cash?