►EXECUTIVE SUMMARY 1) YOU CAN'T SPEND EBITDA: deals get priced on EBITDA multiples, but cash flow is the only thing you can spend. 2) BUILD THE INDIRECT CASH FLOW STATEMENT: a short set of steps turns the income statement and balance sheet into real cash flow. Anyone can learn it. 3) $600K OF EBITDA, ZERO CASH: a distribution deal looked profitable until inventory and 30–90 day customer terms ate every dollar. 4) THE ONLY WAY TO LOSE A BUSINESS IS TO RUN OUT OF CASH: running out of EBITDA isn't even an event.