Case Studies in Cash Flow: What Real Companies Teach Us About Cash Management

Why do so many profitable companies fail? It’s not because they’re losing money — it’s because they run out of cash. That disconnect is why cash management should be a top priority for finance teams.

In this post, we’ll explore four real-world case studies in cash flow, two success stories and two cautionary tales, and break down the strategies and missteps that made the difference. Whether you’re part of a finance team or leading one, these examples offer valuable lessons in building resilience and avoiding costly surprises.

Walmart: Turning the Cash Conversion Cycle on Its Head

Walmart has accomplished a rare financial feat: a negative cash conversion cycle. That means it often collects payment from customers before it has to pay suppliers.

How? Walmart uses its size and scale to negotiate extended payment terms with vendors. At the same time, its efficient supply chain ensures that inventory moves quickly. This combination means cash flows into the business faster than it flows out.

Even if you can’t fully replicate Walmart’s model, the principles still apply. Shortening the cash conversion cycle by managing inventory, payables, and receivables can improve cash availability. 

Amazon: Cash Strategy Fueled by Growth Discipline

Amazon is an example of a business that has successfully replicated Walmart’s model and operates with a negative cash conversion cycle.

Amazon negotiates extended payment terms with suppliers, giving it more time to pay. Meanwhile, it quickly collects customer payments, i.e., cash. That timing difference between incoming customer payments and outgoing supplier payments improves working capital efficiency. It gives the company more cash on hand to reinvest in operations and growth.

By accelerating inventory turnover and delaying cash outflows, Amazon maintains a strong focus on cash management strategies that boost cash flow and working capital. 

Toys R Us: Market Changes, Heavy Borrowing, and Margin Pressure

At its peak, Toys R Us was profitable and beloved. Behind that success were deeper challenges: heavy debt, slow adaptation to e-commerce, and tightening margins. These pressures made it increasingly difficult to manage day-to-day cash flow.

In 2017, Toys R Us filed for bankruptcy, with cash flow misalignment cited as a major factor. The company couldn’t generate enough cash to cover debt payments and operating expenses. Despite strong brand recognition and a history of profitability, cash shortfalls, among other factors, ultimately contributed to its collapse.

This case underscores a core finance principle: past performance doesn’t guarantee future results. Without strong cash flow, many companies struggle to survive downturns, adapt to change, or shift their business strategy.

WeWork: Chasing Growth Without a Cash Flow Foundation

WeWork grew quickly, but its growth was driven more by investor optimism than underlying cash performance. 

The company expanded rapidly without establishing a sustainable cash flow model. It relied on external funding to cover both operating losses and aggressive expansion, rather than building a sustainable model with positive operating cash flow.

When investor confidence waned and funding dried up, the cracks became impossible to ignore. WeWork’s fall serves as a warning: WeWork’s collapse illustrates the risk of relying on external funding without a self-sustaining cash flow model. When funding dried up, the company couldn’t support its operations.

Key Takeaways From These Case Studies in Cash Flow

So, what can finance professionals learn from these examples? Whether you want to replicate Amazon’s success for your organization or help it avoid the fate of Toys R Us, these themes emerge:

• Master the cash conversion cycle: Focus on how quickly your business turns investments (like inventory) into cash. Small gains in accounts receivable, inventory turnover, and payment terms can add up fast.
• Don’t mistake funding for financial health: Relying on outside capital to cover shortfalls is risky, as the WeWork case study showed. Strong cash management includes a plan for sustaining operations through internal cash flow.
• Forecast beyond the obvious: Amazon and Walmart both use scenario planning and sensitivity analysis to anticipate downturns and build resilience. Stress-test your cash flow forecast. Ask questions like, “What happens if revenue drops 10%?” and plan accordingly.
• Make cash flow part of strategic planning: Leading finance teams monitor cash trends continuously and shape business decisions around timing, risk, and availability. Their input helps companies prepare for uncertainty and act quickly when conditions change.

Would Your Team Be Ready for a Liquidity Crunch?

Each company in this post faced different challenges — market shifts, operational complexity, debt, and strategic missteps. In every case, cash flow shaped how well they could respond, adapt, and move forward. Managing growth, risk, and strategic decisions all depends on understanding how cash moves through the business.

As an FP&A professional, you can contribute directly to effective cash management in your organization. To do this effectively, you need fluency in accounting, financial statements, Excel, and financial modeling. Building these skills enables you to support business leaders in their decision-making with best-in-class forecasting and analysis.

Ready to sharpen your FP&A skills? CFI’s FP&A Specialization equips you with the skills and knowledge to excel as an FP&A professional. You will emerge from this program prepared to support business leaders with top-tier financial models, budgets, forecasts, analysis, and more. 

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Additional Resources

Negative Working Capital: Strength or a Warning Sign?

Cash Conversion Cycle

Forecasting Cash Flow

See all FP&A resources

See all Accounting resources