The document discusses the importance of financial planning and accounting for businesses. It covers the key financial statements - the profit and loss statement, balance sheet, and cashflow statement. It provides examples of each statement and gives guidance on how to build budgets and forecasts for sales, costs, expenses, and cashflow. Developing accurate financial plans is important for monitoring business performance, taxation, and avoiding insolvency issues that can cause most startups to fail within the first few years.

1. Business Planning Financial Budgets

3. Financial Metrics Measuring Wealth How do you know if you're rich?

4. Types of Wealth INCOME Earn £150k+ / annum ASSETS Own £1m house Ferrari LIQUIDITY £20k Now or £100k Trust fund?

5. Measures of Wealth Profit (Loss) = Income - Expenses Net Worth (Debt) = Assets - Liabilities Liquidity = Availability of funds

8. Simple Example Balance Sheet

10. Simple P&L Statement Example BlankCo Trading Profit & Loss Statement dated 30th November 2009 £ (000) INCOME 100 less Cost of Sales (COGS) 25 Gross Profit 75 less General Expenses (Overheads) 62 Net Profit 13

13. Building a Budget P&L Sales Prices & Volumes Wages Expenses / Overheads Cost of Sales / Stock Movements Profit & Loss Separate Spreadsheets

22. Conclusion Remember! You can ignore accounts but not the taxman Advice always costs more in retrospect