Cash is the lifeblood of a business. Investors shouldn't underestimate the importance of this simple statement. If a company is using more cash than it is bringing in, it increases the chances of a bad outcome for investors. Electric vehicle (EV) maker Rivian (NASDAQ: RIVN) is a great example of the problem -- and a cautionary tale for current shareholders as well.

At the end of the first quarter of 2023, Rivian had $11.8 billion of cash on its balance sheet. That's a mixture of actual cash, short-term investments, and restricted cash (which isn't really accessible, but is still there just the same). That's a huge amount of money given the company's $23 billion or so market capitalization.

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Source Fool.com