This presentation goes over the fundamental tips of analyzing your business with a balance sheet.

1. H O W T O E VA L U AT E Y O U R
S TA RT U P F I N A N C I A L LY
B Y N O B L E N E W M A N

2. W H E T H E R Y O U A R E WAT C H I N G T H E N E W E S T E P I S O D E O F S H A R K
TA N K O R R E A D I N G T H E H E A D L I N E S O N F O R B E S , I T S E E M S L I K E
M A N Y S TA RT U P C O M PA N I E S A R E H AV I N G A L L O F T H E F U N .

3. T H E Y C R E AT E N E W M A R K E T S , D I S R U P T L O N G S TA N D I N G
C O M P E T I T O R S , A N D AT TA I N L A R G E A M O U N T O F F U N D I N G F R O M
VA R I O U S V E N T U R E C A P I TA L F I R M S .

4. While the idyllic stereotype seems nice,
the harsh truth is that 90% of all startups
tend to fail.

5. There can be a variety of
reasons of why so many
startups tend to fail. Sometimes
it could be because of the lack
of management.
Other times it is because of the
product or service itself.
But the main reason why
startups, and even well
standing businesses, fail is that
they do not look at the
numbers.

6. W H E N R U N N I N G A B U S I N E S S , Y O U N E E D T O M A K E S U R E T H AT Y O U A R E
I N T E R N A L I Z I N G T H E O V E R A L L VA L U E O F Y O U R C O M PA N Y. B Y U N D E R S TA N D I N G T H E
F I N A N C I A L H E A LT H A N D F I N A N C I A L P O S I T I O N O F Y O U R C O M PA N Y, Y O U W I L L B E
A B L E T O M O V E Y O U R C O M PA N Y T O T H E R I G H T PAT H F O R S U C C E S S . T O D O T H I S ,
Y O U N E E D T O P E R I O D I C A L LY A N A LY Z E T H E C O M PA N Y ’ S B A L A N C E S H E E T.

7. A B A L A N C E S H E E T I S T H E P R I M A RY F I N A N C I A L T O O L F O R
A S S E S S I N G T H E R E L AT I V E H E A LT H A N D F I N A N C I A L C O N D I T I O N O F A
B U S I N E S S AT A N Y G I V E N P O I N T I N T I M E .

8. O F T E N T I M E S , T H I S I S R E F E R R E D T O A S N A P S H O T B E C A U S E I T
P R O V I D E S A B U S I N E S S L E A D E R W I T H A C L E A R A N D A C C U R AT E
P I C T U R E O F W H E R E T H E B U S I N E S S I S AT T H AT C U R R E N T M O M E N T.

10. Y O U R B A L A N C E S H E E T Y O U W I L L O F T E N F I N D T H AT T H E F I N A N C E S
A R E B R O K E N D O W N I N T O VA R I O U S R AT I O S . W I T H T H E S E R AT I O S ,
Y O U W I L L F I N D T H R E E M A J O R C AT E G O R I E S : A S S E T S , L I A B I L I T I E S ,
A N D E Q U I T Y. T H E S E T H R E E F I G U R E S W I L L G I V E Y O U T H E N E C E S S A RY
K N O W L E D G E T O F I N A N C I A L LY V I E W A N D E VA L U AT E Y O U R C O M PA N Y.

11. So what are assets,
liabilities, and equity?
• Assets: the economic value that an individual, firm, or company
owns and controls
• Liabilities: a company’s legal debt and expense obligations that
arise during the course of a business operation.
• Equity: the asset amount and the liability amount, you are able
to find the stockholders’ or owners’ overall equity and net worth
of the company. Equity is found by simply finding the difference
between the assets and the liabilities.

12. By internalizing and comprehending
these numbers, you will be able to
ascertain the overall financial health
and status of your business.
In addition, the balance sheet will
give you access to the solvency of
your business, the overall proprietary
interest you get as an owner, your
company’s working capital, inventory
levels, and most importantly, your
company’s long-term debt.

13. W I T H T H I S I N F O R M AT I O N , I T I S I M P O RTA N T T H AT Y O U TA K E T H E T I M E
T O U N D E R S TA N D W H AT T H E S E N U M B E R S M E A N A N D H O W I T C A N
B E N E F I T Y O U I N T H E F U T U R E .

14. Remember, many companies often
overlook these numbers. Do not make that
same…