These are gonna show us how our business is gonna perform,
what we're expecting, and in terms of the cash flow statement,
the cash flow is gonna tell us, how much cash do we have?
How much cash do we need?
When do we need it?
It'll also tell us about break even.
Now this break even, if any of you have, have ever performed break even
analysis before, there's a couple different kinds of break even out there.
Right? There's break even that we perform in
business all the time where we talk about a product.
Or, or how, or how many units, or
how many sales that this business needs to, to perform to break even.
This is not what we're talking about here.
We're talking here about investment break even.
Right?
You are gonna put money into this company.
If not, somebody else is gonna put money into this company.
When are they gonna get their money out of the company?
Okay, that's a break even.
There's another kinda break even that, that's on the, the,
the same the same scheme, basically, the same cash flow statement.
We can also calculate what I call operational break even, right?
Which is,
at what point is the business running without further injections of cash?
So when is the business able to sustain itself?
And then, when does all the money originally invested into this business?
When does it start growing and come out the other side?
And finally, have paid back more then what was put into it so
that's investment break even.
And we're gonna see this all in the cash flow statement and
that's why the cash flow statement is so extremely important.
So we use the cash flow statement for a lot of operational things and
seeing how our business is gonna, is gonna do operationally.
How about the income statement?
Well the income statement really is gonna show us the book profitability of of,
of, this venture.
It's also like the cash flow statement gonna help us control expenses.
And it helps us with scenario evaluation, okay?
Now we're gonna do scenarios in, in both and the way that we're gonna put this,
we're gonna put these together, is you're gonna use one Excel file and one sheet of
Excel will be your cash flow statement and one sheet will be your income statement.
And their gonna be linked, and
this is one of the best pieces of advice I can give you.
Link everything.
Link everything.
Because when you're evaluating your business, you go well,
what if we charge a little bit more for this product?
Or what if we think no, we're gonna sell,
we thought we were gonna sell more of this but now we're gonna sell more of this.
Or what if we can actually get this supplied at a, at a lower cost?
You go in and you change the one thing, and it changes everything, right?
Cuz you, you, create your your income statement, and
your cash flow statement, and they're linked.
So what I like to have, is I actually like to have,
you know, tab one on my Excel will simply be basic info.
Right, and I start putting assumptions in there.
And that's the only point, place, where I ever change those assumptions.
Okay, and as I change them there, they get linked over to other tabs in Excel and
they update everything.