The last 4 years of WeWork's pre-IPO financials show just how important cashflow is to the company's growth

The distinction between an income statement and a cashflow statement is technical and confusing. Essentially, the income statement is the company's formal attempt to match the expenses it paid to generate its revenue. By contrast, the cashflow statement describes the actual movement of cash, in and out of its accounts, once credit and deferred bills are considered.

Most of those colossal"administrative expenses" are the acquisition of lease contracts on the buildings the company runs, according to an early disclosure. WeWork UK appears to be writing up large expenses against its revenue when it acquires a lease, and then adding back cash savings to account for the fact that the lease payments are due over a period of years, not immediately.

WeWork's landlords also offer WeWork various credits and incentives for improving the buildings it rents, and those further offset the cost of leases.

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