eComFuel Podcast What Your Financial Statements Aren't Telling You: Commandment #2 - Master Your Financial Statements
Jan 23, 2026
Discover why even profitable eCommerce businesses often run into cash flow problems. Learn the practical differences between income statements and cash flow management. Contribution margins could change your product strategies, while understanding inventory turn benchmarks might save your business from financial traps. Explore the importance of working capital and how to create an essential cash flow forecast. This engaging conversation lays out simple, actionable steps to master your financial statements and avoid costly mistakes.
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Three Statements, Three Roles
- Think of the income statement as the plane's trajectory: it shows direction and long-term sustainability.
- The balance sheet is the plane's structural integrity and the cashflow is the fuel that keeps it flying.
Calculate Contribution Margin
- Calculate contribution margin for products and channels, not just gross margin, to know what truly funds overhead and profit.
- Focus this on the top 10–20% of SKUs and top 2–3 channels using a side spreadsheet if needed.
Gym Equipment Margin Example
- Andrew uses a gym-equipment example: bench and barbell both sell at $400 with different margins.
- The barbell had a higher contribution margin, making it more valuable despite lower gross margin.
