A plaque remaining from the Big Apple Night Club at West 135th Street and Seventh Avenue in Harlem.

Above, a 1934 plaque from the Big Apple Night Club at West 135th Street and Seventh Avenue in Harlem. Discarded as trash in 2006.

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Entry from March 09, 2009
“Profits are an opinion, cash is a fact”

"Profits are an opinion, cash is a fact” (or “Profit is an opinion, cash is a fact” or “Earnings are an opinion, cash is a fact") is cited in print from the early 1990s, although it’s often said to be an “old adage” in the investment world.  Profits or earnings might not be distributed to the shareholders; a cash dividend is a fact of shareholder wealth.

A somewhat similar financial saying is “Sales is vanity, profit is sanity, cash is reality.”


Google Books
Business Week
Published by McGraw-Hill, Inc., 1992 (This date might not be accurate—ed.)
Pg. 80:
PUMPING UP THE CASH
Analysts used to believe that cash is a fact and earnings an opinion.

Google Books
Principles of Accounting and Finance
By Peter Sneyd
Published by Taylor & Francis
1994
Pg. 44:
It is worth remembering: profit is opinion, but cash is fact.

Google Books
Understanding Cash Flow:
Finance Fundamentals for Nonfinancial Managers Series

By Franklin James Plewa and G. Thomas Friedlob
Hoboken, NJ: John Wiley and Sons
1995
Pg. 159:
PROFITS ARE AN OPINION, BUT CASH IS A FACT:
FINANCIAL STATEMENTS AND CASH FLOW

Access my Library
Many happy returns: money left in the bank or locked up in underperforming businesses simply can’t offer an attractive return.
Publication: Management Today
Publication Date: 01-MAY-95
Author: Smith, Terry
...but the focus of most of such work is back to the old adage that profit is someone’s opinion whereas cash is a fact.

Google Books
Adding Value to Marketing:
The Role of Marketing in Today’s Profit-driven Organization

By David P. Doyle
Published by Kogan Page
1998
Pg. 128:
CASH IS FACT, PROFIT IS OPINION

Access my Library
Unlocking shareholder value.(company financial analysis)
Publication: Management Accounting (British)
Publication Date: 01-OCT-98
Author: Nichols, Paul
(...)
Profit has become to some extent a discredited measure--to quote Price Waterhouse’s Profit is an opinion; cash is a fact.

Google Groups: comp.lang.java.advocacy
Newsgroups: comp.lang.java.advocacy
From: JavaRulez
Date: 24 Oct 2002 00:44:26 +0100
Local: Wed, Oct 23 2002 6:44 pm
Subject: Re: Time for McNealy to go

The guy really is a loon.

“Earnings are an opinion, cash is a fact,” McNealy told the crowd.

The stock price is also a fact and that fact is currently $2.72.

Google Books
Quantitative methods in project management
By John C. Goodpasture
Published by J. Ross Publishing
2003
Pg. 126:
A common refrain is: “Cash is a fact, but profit is an opinion.” This reflects the thought that the expense statement is subject to much interpretation of the GAAP, whereas cash is tangible and well understood without ambiguity.

New York (NY) Times
The Right Tax Plan for Today and Tomorrow
By LAWRENCE B. LINDSEY
Published: January 10, 2003
(...)
When taxes are excessive, people avoid them. Companies rely more on taking out loans and issuing bonds than on selling stock. This creates a more volatile base for our economy because companies’ debt in relation to equity gets skewed. Firms also choose to reward shareholders by driving up share prices rather than by paying dividends. This puts increased emphasis on reported earnings and less on cash payouts—and we know what sort of accounting tricks this can lead to. Some of us may remember the old saying, ‘’Cash is a fact, earnings are an opinion.’’

National Review Online
October 02, 2003, 8:09 a.m.
Another P for Your Pod
Take P/S ratios as seriously as you take P/Es.

By James K. Glassman
(...)
So what’s an investor to do? First, examine a company’s cash flows — essentially the amount of money that actually comes in and out the door. Cash flow, according to the academic literature, is a better predictor of a firm’s future health and true value than accrual earnings. “Earnings are an opinion,” goes the saying. “Cash is a fact.”

Google Books
Forbes
By Bertie Charles Forbes
Published by Forbes Inc., 2004
Item notes: v.173:4-9 2004
Pg. 232:
“EARNINGS ARE OPINION; CASH IS A FACT.”
FIRST recorded in the 1890s, that adage deserves to be etched in bronze above every investor’s desk.

Google Books
Principles of cash flow valuation: an integrated market-based approach
By Joseph Tham, Ignacio Vélez-Pareja
Published by Academic Press
2004
Pg. 233:
Recall that net income is an opinion but cash is a fact. The funds remain in the firm and are not received by the shareholders. It is an illusion to assume that the funds are distributed to th shareholders when in fact the excess cash is in the firm.

Financial Skeptic
Monday, October 17, 2005
Cash is Fact. All else is an opinion
Main stream financial media increasingly reports that dividend paying stocks provide superior returns over some very long time frames (read ten years and more). Quelle surprise. It is impossible to argue with cash. Can the company pay the dividend; yes or no.

Google Books
Management Accounting - Financial Strategy: Financial Strategy
By John Ogilvie
Published by Elsevier
2006
Pg. 45:
He revisits the ‘profit is an opinion; cash is a fact’ argument of a couple of decades ago, and concludes that management will have to relearn how to manage the fact of cash, and that the ability to manage and manipulate profit is no longer sufficient.

Entrepreneurial Growth
Seth Godin had a post the other day that gave 10 secrets of the marketing process. “#1. Don’t run out of money. It always takes longer and costs more than you expect to spread your idea. You can budget for it or you can fail.” - He’s right and I often use the saying “Profit is a concept, cash is a fact”.
(...)
Posted by Andrew Nicol at Wednesday, 25 October 2006 at 1:34 PM

Google Books
Forty Years a Speculator
By Fred Carach
Published by FRED CARACH
2007
Pg. 21:
Or as the wise old Wall Street adage has it “earnings are an opinion and cash is a fact” and dividends can only be paid out of cash.

Google Books
Profiting: Webster’s Quotations, Facts and Phrases
Compiled by Icon Group International, Inc.
Published by ICON Group International, Inc.
2008
Pg. 1:
Profits are an opinion, cash is a fact. - Anonymous

Posted by Barry Popik
New York CityBanking/Finance/Insurance • (1) Comments • Monday, March 09, 2009 • Permalink


Thank you for mentioning my book!

Sincerely

David P. Doyle

Posted by David Doyle  on  10/26  at  01:50 PM

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