Presentation Transcript

1. Small Business Financials

2. Financial Planning Establish a Budget - Anticipate sources and amount of income Predict types and amounts of expenses Revenue – Money that is received by the business (Income) Expenses – The costs of operating a business. Difficult to establish for a new business, many unknowns.
3. Financial Equation Revenue – Expenses = Profit/Loss
4. Types of Budgets Start Up Budget Plans the income and expenses from the beginning of the business until it becomes profitable. Uses start up financing to pay for expenses. Operating Budget Day to day financial plan of the business, net income/net loss is shown Budgets are typically 6 months to a year. Cash Budget An estimate of the actual money received and paid out for a specific period.
5. Financial Records Used to record and analyze the financial performance of a business. Record Keeping Cash Accounts Receivable/Payable Inventory Payroll/Employee Assets
6. Financial Statements Reports that summarize the financial performance of a business. Balance Sheet – List the assets, liabilities, and owner’s equity (capital) Income Statement – Reports revenue, expenses and net income/net loss http://finance.yahoo.com/