The Gross Margin Illusion: Why Profitable Companies Still Run Out of Cash
Gross margin is not profit; it’s often a misleading metric that hides cash flow risk. This issue breaks down why profitable companies still run out of cash: the six-layer margin stack, showing how companies reporting 50%+ gross margins can operate at single-digit real margins after factoring in distribution costs, infrastructure, FX volatility, and payment delays, especially in emerging markets in Africa.