Intelligent Investment Today - The Warren Buffett Way
Jun 30, 2026 · 17 min · 9 segments
In this episode of *Intelligent Investment Today*, we complete our trilogy of financial statement analysis by exploring the cash flow statement through the lens of Benjamin Graham. Why do experienced…
David CoombsHost
Now, this may seem sort of similar to the income statement, but the two are very different.
Depreciation reduces reported profits even though no cash physically leaves the business at that moment.
In other words, accounting profits are not the same thing as cash generation, and this distinction is very important.
A business can report healthy earnings while struggling financially if cash flow remains weak.
Conversely, some businesses may generate strong cash despite relatively modest accounting profits.
This is why many experienced investors eventually arrive at the same conclusion.
Now, this may seem sort of similar to the income statement, but the two are very different.
Depreciation reduces reported profits even though no cash physically leaves the business at that moment.
In other words, accounting profits are not the same thing as cash generation, and this distinction is very important.
A business can report healthy earnings while struggling financially if cash flow remains weak.
Conversely, some businesses may generate strong cash despite relatively modest accounting profits.
This is why many experienced investors eventually arrive at the same conclusion.
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