Copyrights. José Manuel Romero Rodríguez,
2026. All rights reserved.
In my years advising management committees, I have seen how the opening question of meetings has changed revealingly. Previously, the first thing on the table was ‘What is the profitability?’. Today, regardless of the sector or the size of the company, the question gaining ground is ‘How is the cash?’. This shift does not mean that margins have lost importance; it means that leaders have understood something fundamental: without liquidity, profitability may never materialize. Managing both dimensions together is precisely what separates organizations that simply invoice more from those that build value sustainably.
The challenge for any CEO is not minor. There is constant pressure to demonstrate growth every quarter, to expand market share, and to seize opportunities that, at first glance, seem unmissable. However, growing at any cost can become a silent trap: I have seen companies increase their sales by 30% and, at the same time, face severe liquidity tensions, deteriorate their margins, or need more external financing just to sustain that pace. The relevant conversation, therefore, no longer revolves around how much we grow, but whether that growth is creating real value for the organization. The competitive advantage, in an adverse environment, depends directly on the quality and timing of the decisions made in the governing bodies.
This article brings together practical learnings, key indicators, and decision criteria so that CEOs and general managers can drive growth without compromising profitability. Let’s explore which metrics deserve weekly monitoring, how to distinguish between healthy growth and growth that drains resources, and why the financial function must evolve from being a mere results reporter to becoming a decision anticipator.
For decades, business success was measured almost exclusively through EBITDA, operating margin, or year-over-year sales growth. These indicators are still necessary, but they are no longer sufficient. The recent experience of many organizations, especially in inflationary contexts or high interest rates, has shown that a healthy income statement can coexist with cash registers at the limit. Gaps between collections and payments, imbalances in working capital, or investments that immobilize cash for too long can put even profitable businesses on paper in check.
This shift in focus has caused a profound transformation in the role of the CFO and, by extension, in the CEO’s agenda. It is no longer enough to validate whether a decision is profitable; now it is necessary to ask when the invested cash will return, what impact it will have on working capital, what risks it introduces to cash flow, and what the opportunity cost of allocating resources to one initiative over another is. The difference between a company that simply grows and one that grows sustainably is rarely just about selling more: it is about the quality of its capital allocation decisions.
Adopting this dual view—profitability plus liquidity—does not mean abandoning traditional metrics, but layering an additional analysis. It means understanding that EBITDA reassures shareholders, but it is cash that allows payrolls to be paid. And when both perspectives are integrated into the decision-making process, the result is more robust growth, less dependent on external factors, and much more resilient to adverse economic cycles.
The answer is simpler than it seems: because cash does not allow interpretations or accounting adjustments. A profit can be subject to different allocation criteria, but the cash balance at the end of the day is an objective, binary data: there is or there is not. In markets where credit becomes more expensive and investors demand greater financial discipline, having cash to face operational payments, invest in strategic opportunities, or resist a temporary market contraction becomes the first line of competitive defense.
In addition, cash acts as an excellent revealer of hidden inefficiencies. An excellent commercial business that takes months to convert its sales into collections may be unintentionally financing its customers at the expense of straining its own liquidity. A purchasing negotiation that achieves great unit savings but unnecessarily immobilizes working capital can be counterproductive. Cash forces us to look beyond the income statement and connect each operational decision with its real impact on the day-to-day of the cash register.
There is a deep-rooted, and dangerous, belief that equates EBITDA with cash generation. Nothing could be further from the truth. EBITDA measures the ability to generate operating result before interest, taxes, depreciation, and amortization, but it does not deduct the necessary investments in working capital, nor debt payments, nor cash outflows for maintenance or expansion investments. That is, a company may present a growing EBITDA and, at the same time, be consuming cash at an unsustainable rate.
Therefore, the CEO and CFO’s job is to manage both dimensions jointly and to educate the rest of the organization to understand the difference. A project with an extraordinary ROI on paper can become a problem if it consumes cash long before generating returns. Weekly monitoring of net working capital, the evolution of collection and payment days, and the anticipated cash position for the next weeks should be part of any executive’s dashboard. As simple as that.
Having an updated control board with key indicators is not a luxury or a trend: it is an operational necessity. The speed at which market conditions, interest rates, or customer demand change makes monthly or quarterly reviews insufficient to anticipate problems. Weekly monitoring of a handful of well-selected metrics allows detecting deviations in time, adjusting priorities, and allocating resources with greater precision.
These five KPIs represent a financial compass that, reviewed with discipline, provides the CEO with a clear picture of the economic health of the business without needing to dive into endless reports. It is not about monitoring dozens of indicators, but choosing those that really inform about the company’s ability to generate value, maintain liquidity, and finance its growth without taking excessive risks.
Net Working Capital, calculated as the difference between current assets and current liabilities, measures the company’s ability to face its immediate payments with available resources. A negative or decreasing value for several consecutive weeks is a warning signal that no CEO should ignore. It is not just a number: behind a deteriorated NWC usually hides inefficient inventory management, excessive collection periods, or a growing dependence on supplier financing.
Reviewing this KPI every week allows anticipating cash tensions before they affect daily operations. In addition, it forces maintaining a financial discipline that spreads to the rest of the organization: when the CEO asks about the evolution of working capital, the commercial and operations teams learn to internalize that selling is not the same as collecting, and that each day of immobilized inventory has a real cost.
Beyond gross margin or EBITDA, the indicator that best reflects the efficiency with which the company uses its resources is profitability on total investment, calculated as net profit divided by total investment. This KPI answers an essential question: Are we earning enough in relation to what we have invested? An apparently healthy margin can mask mediocre profitability if the base of assets needed to generate it is disproportionately large.
From the CEO’s perspective, this indicator is crucial to guide decisions about which products, customers, or business lines deserve more resources and which should be resized or abandoned. The 80/20 rule is often met with surprising precision: in many companies, 20% of customers or products generate 80% of real profitability. Identifying that minority and focusing efforts there is one of the fastest and most effective levers to improve results without needing to increase total sales.
Return on investment is probably the most versatile and worst-used indicator in the financial arsenal. Its formula is simple—profit obtained minus investment, divided by investment—but its true value appears when applied granularly: by project, by sales channel, by marketing campaign, or by technological investment. Only then does it become a comparison and prioritization tool that allows the CEO to decide quickly which initiatives to promote and which to discard.
A frequent error is calculating ROI only at the end of the project, when there is no room for maneuver. The recommendation is to establish intermediate return milestones and monitor them continuously. If an investment is not generating the expected return within the planned period, the weekly dashboard should trigger an alert that forces reviewing the initial assumptions. This practice turns ROI into an active management instrument, not a mere post-hoc justification exercise.
Weekly invoicing allows observing the evolution of the business almost in real time. It is important not to confuse it with cash received, as it includes credit sales that have not yet been collected, but precisely for that reason it is a perfect complement to liquidity indicators. Analyzing invoicing broken down by business lines, regions, or channels helps detect lagging areas, identify products with increasing traction, and anticipate trends before they consolidate in monthly reports.
A CEO who reviews this data every week is in a position to adjust prices, redirect commercial efforts, or rethink quarterly objectives with agility. The key is not to limit oneself to looking at the absolute number, but to observe percentage variations, the composition of the sales mix, and the evolution compared to the same weeks of the previous year. This habit transforms invoicing from a retrospective data into an advanced compass of demand.
The debt ratio, calculated as total liabilities divided by total assets, indicates the degree of dependence on external financing. A high value is not necessarily negative—it depends on the sector, the business model, and the cost of that debt—but it must be closely monitored, especially in environments of rising interest rates. The goal is not to minimize indebtedness at all costs, but to ensure that the leverage level is consistent with cash generation capacity and the stage of the cycle in which the company is located.
For the CEO, reviewing this KPI weekly implies maintaining a permanent conversation about the financial structure of the business. Are we too exposed to short-term debt? Does it make sense to refinance any tranche? What margin do we have to face a one percentage point rise in rates? These questions, formulated regularly, prevent indebtedness from becoming a silent problem that explodes when it is too late to correct it.
The pressure to demonstrate immediate results leads many companies to postpone difficult decisions. Maintaining unprofitable products, customers that consume resources without adding value, or strategies that have stopped working is often justified with arguments like ‘It will improve’ or ‘We can’t afford to lose that account’. The problem is that, when the situation finally becomes unsustainable, correcting course is much more costly and traumatic than having acted in time.
Protecting profitability without compromising growth capacity requires a delicate balance. It implies reviewing the cost structure with a scalpel instead of an axe, prioritizing investments with higher returns, actively managing working capital, and focusing commercial efforts on customers that really create value. But, above all, it requires a quality that is scarce in management committees: the ability to make decisions thinking about the company to be built in the long term, not just the results to be presented this quarter.
One of the most common traps in business management is confusing activity with value creation. Opening new markets, incorporating more customers, or launching additional product lines can be very visible and give the sensation of progress, but if those initiatives do not exceed a minimum threshold of risk-adjusted profitability, the only thing achieved is increasing operational complexity and consuming scarce resources. Discipline in capital allocation begins by asking an uncomfortable question: Which businesses generate cash and which ones consume it?
A practical tool to guide this reflection is to classify the different business units, products, or customer segments in a profitability vs. working capital consumption matrix. Those that generate good margins but immobilize a lot of cash should be subject to detailed analysis to reduce their cash footprint. Those that consume more resources than they contribute should be resized, restructured, or, if necessary, abandoned. This surgical clarity is precisely the opposite of the indiscriminate linear cuts that are so often applied and that, frequently, destroy more value than they aim to protect.
There is a financial decision that rarely appears in manuals and that, nevertheless, can be the most profitable of all: deciding not to grow. It sounds contradictory in a business culture that celebrates constant expansion, but in certain circumstances, saying ‘no’ to an opportunity is what preserves the financial health of the organization. Accepting a new contract that requires disproportionate investments, entering a market where collection periods are eternal, or assuming a project that dilutes the margin without generating strategic learning are classic examples of growth that destroys value.
A CFO or a CEO do not add value when they mechanically approve any growth proposal. They add value when they know how to identify which type of growth suits the business at each moment. This discrimination capacity requires looking far beyond the income statement: it involves analyzing the impact on cash flow, the risk profile, the additional operational burden, and the opportunity cost of committed resources. In summary, it requires understanding that not everything that makes the company bigger makes it stronger.
The annual forecast that is prepared in October, approved in December, and reviewed in June—when problems have already occurred—is one of the greatest enemies of managerial agility. Medium-sized companies, in particular, usually have clear medium-term strategic visions, but their internal processes, especially financial ones, are not designed to sustain those strategies when the context changes fast. Replacing the static budget with a dynamic forecast, tied in real time to the business’s real variables—demand, programming mix, exchange rates, available financing—is a process change that produces an immediate impact on decision quality.
When finance stops informing numbers and starts anticipating scenarios, the CEO gains valuable time. Instead of reacting to already consolidated deviations, they can simulate the impact of different alternatives before committing resources. This evolution requires investment in systems and, above all, a cultural change: finance teams must go from being budget guardians to becoming strategic partners that facilitate informed decision-making at all organizational levels.
Having the right KPIs is a necessary but not sufficient condition. As important as choosing what to measure is defining how to visualize it and with what frequency to update it. A good control board must show updated data, generate automatic alerts in case of significant deviations, and allow weekly, monthly, and year-over-year comparisons. Current technology, from ERPs like SAP or Oracle to platforms like Power BI or ClickUp, allows building executive dashboards that centralize information and automate reports.
The recommendation for any CEO is to start with a simple panel that includes the five KPIs described above, and add layers of complexity as the finance team gains analytical maturity. The goal is not to accumulate data, but to facilitate strategic conversation. An effective board is one that, with a single glance, allows answering three questions: Are we generating cash? Are we creating value with what we invest? And is there any risk that requires immediate attention?
If I had to summarize everything in a single idea, it would be this: growing is not the same as creating value, and the difference between both concepts is measured in cash. You do not need to be a finance expert to internalize this distinction or to start applying it day-to-day. It is enough to incorporate three habits: ask weekly about the evolution of working capital, demand that any investment proposal includes a clear estimate of the cash return period, and periodically review which customers or products are really contributing to the result and which ones are only adding volume.
Companies that survive and thrive in adverse environments are not necessarily those that sell the most, but those that make better decisions about where to allocate their limited resources. And those decisions rarely require sophisticated models: they require reliable information, weekly discipline, and the courage to act on what the numbers reveal, even if sometimes it forces saying ‘no’ to opportunities that seem irresistible.
From a technical perspective, integrating profitability and liquidity dimensions into a single decision-making framework requires overcoming the limitations of traditional accounting models. Tools like cash conversion cycle analysis, ROIC segmentation by business unit, or cash flow simulation models under different macroeconomic scenarios allow elevating the financial function to a truly strategic level. The key is to design dynamic forecasting processes that replace the rigidity of the annual budget with continuous planning, sensitive to the business’s real variables and capable of generating early alerts.
The challenge for CFOs and financial directors is not only technical: it is, above all, about positioning. Going from being the area that informs results to becoming the partner that anticipates decisions requires building analytical credibility, communicating with executive clarity, and developing a business vision that transcends financial statements. When the finance team understands the business model as well as the commercial team, and the CEO internalizes that the strategy must turn value into cash, the entire organization gains speed, resilience, and the ability to grow without risking its sustainability.