Law & Order

Today marks the six month anniversary of my father’s death. In Serbia, while ancient customs such as exhuming the interred and performing a double-burial have long been unobserved, it is still customary for family and friends to gather and remember. Nothing was planned, but I took the day off and came up with a number of things to do to commemorate the day. All of which were making me tremendously depressed. After a while, I started doing homework as a distraction.

How would I know my assignment would be relevant to my father’s life?

I am studying financial statements, a banal topic. More specifically how to analyze them, how to identify inconsistencies, and the impact of certain attributes or transactions on a company's health and ability to grow.

What does this have to do with my father? He was a successful businessman at one point in his career, working in an industry that dealt in large, frequent cash transactions. He was a generous man and trusting of his business partners - to a fault. He became lax about monitoring employees, making the mistake of thinking that if he treated people well they would extend similar courtesies. He was unaware that opportunists lurked, waiting for the best time to strike.

And strike they did.

I won’t go into detail, but what resulted in my father’s business was a cash crisis. His operations were fraudulently mismanaged to the point where his payable and receivable cycles no longer matched; meaning when bills came due, the money that was owed wasn’t coming for several more months.

My professor cautioned our class with a well-known business maxim, “Always remember that cash flow is king, inability to generate cash will cause your business to fail.”

This is true for any business (internet start-ups take heed; you can’t live off of credit alone.) By the time my father realized what was happening, he couldn’t reverse the dramatic impact on his trade cycle. As a result, he unknowingly bounced a check to the government, raising red flags and he couldn't afford future errors.

Despite selling hard assets to make ends meet, the cash flow crunch continued to cause a meltdown in his operations. The strength of his company relied upon his ability to deliver goods in a timely manner and he needed to stretch his cycles, causing suppliers and customers alike to get pissed at him and withhold goods and payment. Because of the inability of his business to catch up to the disruption in cash flows and subsequent reluctance of banks to lend to him due to questionable credit, he went bankrupt. It was a massive and miserable domino effect.

I believe it was the decline of his business, dreams, and hopes that led to the physical and emotional deterioration that marked him over the last 18 years. Don’t get me wrong, my father was a fighter, he built a new business, but was unable to achieve the type of peak performance he’d once enjoyed due to setbacks that seemed to mount endlessly.

This has been one of the strangest weeks in my life. I don't often talk about the ineffable, but I do believe in a Divine Order to life and death which is coming together in ways I’d never anticipated, like learning about cash flow statements and unlocking one of the mysteries of my father’s life. I never understood the mechanics of what had happened to his business. It has haunted me for a long time.