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BA 346

BA 346. Working as an Entrepreneur Week 10. Agenda. Checkin: How’s the Cash Budget? Financial Statements What are they Why are they important How to read them How to build them. What are financial statements?. Historical documents Financial statements review the history of a company

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BA 346

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  1. BA 346 Working as an Entrepreneur Week 10

  2. Agenda • Checkin: How’s the Cash Budget? • Financial Statements • What are they • Why are they important • How to read them • How to build them

  3. What are financial statements? • Historical documents • Financial statements review the history of a company • Relevant, useful, timely, accurate • Probably audited (always for public companies) • Projections • Pro Forma statements are used to project what the future is supposed to look like

  4. What statements do we use? • Balance Sheet • Income Statement (or a P&L) • Statement of Cash Flows

  5. Why is each important? • Balance Sheet • What do we own? • What do we owe? • What is our net worth (book value)? • Income Statement • How much did we sell? • How much did we spend? • How much profit did we make? • Statement of Cash Flows • How do we connect the other two statements? • How much cash did we get from or use for operations? • How much cash did we use for investing in our business? • How much cash did we use for financing our business? • How is this different from a cash budget?

  6. How to read the balance sheet

  7. How to read the income statement

  8. How to read the statement of cash flows

  9. Workshop (in class only) • Building Pro Forma Financial Statements

  10. Next Week • Project is due • No exam – I have waived the final exam so you can focus on your projects

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