Cash is not profit
Read earnings and cash movement together before drawing conclusions about performance.
Follow the timing
Revenue may be recognized before an invoice is collected. Expenses may be recorded before or after the related cash payment. These timing differences are normal, but they must be understood when assessing liquidity.
Read the balance sheet
Changes in receivables, inventory and payables help explain why cash moves differently from reported earnings. Review the composition and age of balances, not only their totals. A growing balance can reflect either growth or a process problem.
Ask a useful question
Instead of asking why profit is not in the bank, ask which operating movements explain the difference. That question leads to collections, purchasing, inventory and payment decisions that management can actually influence.