Advice from an 80 year old billionaire with businesses that span across many different industries, from old line manufacturing to high tech.  One of the pearls of wisdom he cites is an important factor in sizing up investments and operating businesses, cash flow is king.

“I’m always very careful with my cash flow.  That will ensure I have extra capital to get into another industry whenever I want to.”

Forget gross merchandise volume, return on equity or debt-to-equity ratios. The most important metric in business is cash flow, according to Li. The tycoon says he’s been keeping an eye out on cash flow since he became an entrepreneur more than six decades ago. One needs to generate good cash flow before expanding into other industries and to store up some insurance for a rainy day, he said.

Source: Five Pieces of Advice From Hong Kong’s Richest Man – Bloomberg