Income statements & cash flow
Upcoming SlideShare
Loading in...5

Income statements & cash flow






Total Views
Views on SlideShare
Embed Views



0 Embeds 0

No embeds


Upload Details

Uploaded via as Microsoft PowerPoint

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
Post Comment
Edit your comment

Income statements & cash flow Income statements & cash flow Presentation Transcript

    • Explain the importance of an income statement
    • Identify the parts of an income statement
    • Prepare an income statement
    • Understand how cash flow affects entrepreneurs
    • Demonstrate a burn-rate calculation
    • Income statements are prepared periodically to show how a business is performing:
      • Monthly
      • Quarterly
      • Annually
    • Income statements differ in how they show their variable expenses. They may appear under:
      • Cost of Goods Sold
      • Cost of Goods Manufactured and Sold
      • Cost of Services Sold
    • Income statements generally include these parts:
    • Revenue . The money the business receives from selling products or services.
    • Cost of Goods Sold . The cost of producing the goods or services.
    • Gross Profit . Net sales minus the cost of goods sold.
    • Operating Expenses . The expenses of running the business.
    • Pre-Tax Profit . Gross profit minus the operating expenses.
    • Net Profit (Loss) . Pre-tax profit minus taxes.
    View slide
  • View slide
    • To prepare an income statement:
    • Determine the business's Revenue.
    • Calculate the Cost of Goods Sold.
    • Determine the Gross Profit.
    • Calculate Operating Expenses.
    • Determine the Pre-Tax Profit.
    • Determine the Net Profit or Loss.
    • The cash flow equation is:
    • A cash flow statement is a financial document that records inflows and outflows of cash when they actually occur.
    • Five ways to avoid being caught without enough cash to
    • pay your bills are:
    • Collect Cash as Soon as Possible
    • Pay Bills Close to the Due Date
    • Keep Track of Your Cash
    • Lease Equipment
    • Keep Inventory to a Minimum
    • Cash flow is cyclical for many businesses, meaning that it
    • varies according to the time of year.
    • Use the burn rate to calculate how long a company can go without revenue.