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![P&L: BASIC STRUCTURE
Revenue
- Cost of Goods Sold (Variable costs)
= Gross Profit (Rev – COGS)
Gross Profit
- Expenses (Fixed Costs)
R&D
Sales and Mktg
General and Administrative (G&A)
= Net Profit [Gross Profit - Expenses]
.](https://image.slidesharecdn.com/apia2018-rickrasmussen-buildingafinancialmodel-180924103814/85/APIA2018-Rick-Rasmussen-Building-a-Financial-Model-13-320.jpg)
![P&L: BASIC STRUCTURE
Revenue
- Cost of Goods Sold (Variable costs)
= Gross Profit (Rev – COGS)
Gross Profit
- Expenses (Fixed Costs)
R&D
Sales and Mktg
General and Administrative (G&A)
= Net Profit [Gross Profit - Expenses]
+/- Other Income (expense)
= Net Income](https://image.slidesharecdn.com/apia2018-rickrasmussen-buildingafinancialmodel-180924103814/85/APIA2018-Rick-Rasmussen-Building-a-Financial-Model-14-320.jpg)
![THREE THINGS TO FIGURE OUT…
Revenue
- Cost of Goods Sold (Variable costs)
= Gross Profit (Rev – COGS)
Gross Profit
- Expenses (Fixed Costs)
R&D
Sales and Mktg
General and Administrative (G&A)
= Net Profit [Gross Profit - Expenses]
+/- Other Income (expense)
= Net Income](https://image.slidesharecdn.com/apia2018-rickrasmussen-buildingafinancialmodel-180924103814/85/APIA2018-Rick-Rasmussen-Building-a-Financial-Model-15-320.jpg)
Uploaded byEuropean Innovation Academy
APIA2018 - Rick Rasmussen - Building a Financial Model
This document provides guidance on building a simple financial model for startups seeking investment. It discusses that investors want to see financial projections that show there is money to be made. It then covers the key components of building a financial model, including determining unit economics, revenue and cost assumptions over time, and constructing profit and loss statements. The document emphasizes translating the startup story into numbers and keeping projections within reasonable ranges compared to benchmarks.
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APIA2018 - Rick Rasmussen - Building a Financial Model
- 1. BUILDING A SIMPLEFINANCIAL MODEL 1 © Rick Rasmussen 2018
- 2. START UP FINANCIALMODELS Investors don’t put their money into ideas. They put their money into businesses… Your financial model is your ‘real’ business plan Revenues Profits Cash needs Hiring plans Burn Rate, Runway 2
- 3. WHAT DO VCSWANT? What you pitch Unmet need Solution Market size Product-Market Fit Go-to Market Team Competition Financial projections Ask
- 4. WHAT DO VCSWANT? What you pitch Unmet need Solution Market size Product-Market Fit Go-to Market Team Competition Financial projections Ask What they hear Is there money to be made? How much money can we make? Are these the people who will make me money?
- 5. INVESTORS EXPECT: A 5-yearProfit & Loss (P&L) A simplified Income Statement Broken out by Year in the presentation
- 6. HOW CAN YOUDO THIS? You’re predicting the future With little or no real evidence Trying to reassure investors that your guesses are valid 6
- 7. TELL A STORY Startupfinancials are your story expressed in numbers Build out your story and then translate 7
- 8. THREE FINANCIAL STATEMENTS BalanceSheet: A "snapshot” Assets vs. Liabilities At a specific time Income Statement: A “video” Measures Financial Health Income vs. Expenses Over a period of time Cash Flow Statement: Shows effects on Cash based on Balance Sheet and Income Statement accounts
- 9. THREE FINANCIAL STATEMENTS BalanceSheet: A "snapshot” Assets vs. Liabiliities At a specific time Income Statement: A “video” Measures Financial Health Income vs. Expenses Over a period of time Cash Flow Statement: Shows effects on Cash based on Balance Sheet and Income Statement accounts
- 10. THREE FINANCIAL STATEMENTS BalanceSheet: A "snapshot” Assets vs. Liabiliities At a specific time Income Statement: A “video” Measures Financial Health Income vs. Expenses Over a period of time Cash Flow Statement: Shows effects on Cash based on Balance Sheet and Income Statement accounts Non-rigorous version often called a Profit & Loss Statement or P&L
- 11.
- 12. P&L: BASIC STRUCTURE Revenue -Cost of Goods Sold (Variable costs) = Gross Profit (Rev – COGS) .
- 13. P&L: BASIC STRUCTURE Revenue -Cost of Goods Sold (Variable costs) = Gross Profit (Rev – COGS) Gross Profit - Expenses (Fixed Costs) R&D Sales and Mktg General and Administrative (G&A) = Net Profit [Gross Profit - Expenses] .
- 14. P&L: BASIC STRUCTURE Revenue -Cost of Goods Sold (Variable costs) = Gross Profit (Rev – COGS) Gross Profit - Expenses (Fixed Costs) R&D Sales and Mktg General and Administrative (G&A) = Net Profit [Gross Profit - Expenses] +/- Other Income (expense) = Net Income
- 15. THREE THINGS TOFIGURE OUT… Revenue - Cost of Goods Sold (Variable costs) = Gross Profit (Rev – COGS) Gross Profit - Expenses (Fixed Costs) R&D Sales and Mktg General and Administrative (G&A) = Net Profit [Gross Profit - Expenses] +/- Other Income (expense) = Net Income
- 16.
- 17. HOW DO YOUDO THIS? 17 in $M Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Revenue $0.1 2.5 $17.4 $31.5 $49.2 COGS 0.2 1.0 7.2 11.8 16.4 Gross Profit (.02) 1.4 10.1 19.7 32.8 Expenses 2.4 6.2 10.1 15.1 21.1 Net Profit ($2.4) ($4.7) $0.05 $4.5 $11.6 ?
- 18. WHAT DOES YOURCURVE LOOK LIKE? How deep? How wide? Timing? Slope? 18
- 19. STEPS TO BUILDA PROFIT & LOSS STATEMENT 1. Build out Unit Economics 2. Build a timeline with assumptions 3. Use curves to build short-term model (12, 18 or 24 months) 4. Predict Year 5 model (within Zone of Reason) 5. Fill-in P&L and/or present graphs Benchmark vs. Competition Make sure everything passes “common sense” test .
- 20.
- 21. UNIT ECONOMICS Fundamental buildingblock of any financial model What does it take to build and sell one? One product delivered One software license One job completed One client serviced
- 22. UNIT ECONOMICS Unit Revenue UnitCosts Fixed Costs (overhead)
- 25. PRIMARY BUSINESS MODELS Product TangibleSolution Design once, sell many Service Custom Solution Intangible Value Trade Connect Buyers and Sellers Product Service Trade
- 26. SECONDARY BUSINESS MODELS Combiningprimary business modes in groups Product Service Trade Marketplace x x Brokerage x x Subscription x x Ecosystem x x x Product Service Trade
- 27. REVENUE MODELS DRIVEUNIT ECONOMICS Type Business Revenue Model Example Primary Product Sales One time sale Presentation Clicker Service Sales Hourly Rate Consultant Trade Resale Retail Sales Derivative Subscription Monthly Revenue Software as a Service Marketplace Transaction Fees Ebay, Etsy Brokerage Commission Fees Real Estate Ecosystem Combination Apple
- 28. REVENUE MODELS DRIVEUNIT ECONOMICS Type Business Revenue Model Example Primary Product Sales One time sale Presentation Clicker Service Sales Hourly Rate Consultant Trade Resell Retail Sales Derivative Subscription Monthly Revenue Software as a Service Marketplace Transaction Fees Ebay, Etsy Brokerage Commission Fees Real Estate Ecosystem Combination Apple
- 29. Example: Product Sales Beholdthe lowly clicker
- 30. Getting into the Clickerbusiness What type of business? Existing? Re-segmented? New?
- 31.
- 32. Retail price: $35 ChannelMargin: - $19 Wholesale price $16
- 33. Retail price: $35 ChannelMargin: - $19 Wholesale price $16 You typically don’t control this… Revenue that comes to the company
- 34. UNIT ECONOMICS 1. UnitPrice $16 2. Each unit has a Cost This is your variable cost Also called COGS for Cost Of Goods Sold
- 35. UNIT COST Subsystem Cost Housing$1.50 Electronics + Laser $2.50 Battery $0.25 Packaging, manual $1.00 Wireless Module $1.75 Total Unit Cost $7.00 Draw a Circle around the Unit. What does it directly cost to produce?
- 36. UNIT PROFIT This isthe profit you make per unit sold Unit Price minus Unit Cost UNIT PROFIT
- 37. UNIT PROFIT Profit madeper unit sold: Average Selling Price (ASP): $16.00 Average Unit Cost: - $7.00 Unit Profit: $9.00
- 38. UNIT PROFIT MARGIN% Percent profit margin = (Revenue – cost) / Revenue = Profit / Revenue = $9 / $16 = 56.25% 43.75% 56.25% Revenue Unit Costs Unit Profits
- 39. UNIT PROFIT MARGIN% Percent profit margin = (Revenue – cost) / Revenue = Profit / Revenue = $9 / $16 = 56.25% Is this good? 43.75% 56.25% Revenue Unit Costs Unit Profits
- 40. REVENUE MODELS DRIVEUNIT ECONOMICS Type Business Revenue Model Cost Model Primary Product Sales One time sale COGS Service Sales Hourly Rate Hourly Cost Trade Resell COGS Derivative Subscription Monthly Revenue CAC Marketplace Transaction Fees open Brokerage Commission Fees open Ecosystem Combination open
- 41. Law Firm Working forhourly billings Billing Rate - Hourly Pay Hourly Profit SERVICE EXAMPLE
- 42. REVENUE MODELS DRIVEUNIT ECONOMICS Type Business Revenue Model Example Primary Product Sales One time sale Presentation Clicker Service Sales Hourly Rate Consultant Trade Resell Retail Sales Derivative Subscription Monthly Revenue Software as a Service Marketplace Transaction Fees Ebay, Etsy Brokerage Commission Fees Real Estate Ecosystem Combination Apple
- 43.
- 44. FIXED VS. VARIABLECOSTS
- 45. TOTAL COSTS Variable Costs FixedCosts Variable costs vary with the amount produced. Fixed costs remain the same, no matter how much output a company produces.
- 46. TOTAL COSTS Variable Costs FixedCosts Variable costs vary with the amount produced. Fixed costs remain the same, no matter how much output a company produces. COGS Expenses
- 47. FIXED COSTS Business coststhat are constant independent of units produced Generally includes: Salaries Rent, Insurance and Utilities Marketing All stay the same whether you sell one or 1M units
- 48. FIXED COSTS? If youhave employees, you have Salary costs If you have a physical building, you pay Rent, Insurance, Utilities If you promote, Marketing and Sales are a primary expense * Exception to both would be large factories where Capital cost considerations need to be added
- 49. SALARIES How many peopleneeded to run your business? Management Engineers Marketing, Sales, etc. Factory workers are considered Direct Labor, part of COGS
- 50. RENT Price varies byuse Commercial or store fronts Warehouse space Offices: Consider 20 sq meter per employee
- 51. MARKETING Expenses relating topromotion and selling Often significant for B2C and B2B2C companies Use 30% to 55% of revenues if you need to build a brand
- 52. IS MARKETING VARIABLEOR FIXED? … It depends Yes: If we can attribute marketing costs on a per-unit basis Example is a coupon redeemed for a given unit This is a Unit or Variable Cost. No: If we are running a general campaign and cannot attribute to specific unit sales These are Fixed Costs or Expenses
- 53. A UNIT COSTEXAMPLE: COUPONS We run a coupon campaign for $2 off That specific coupon attributable to a clicker sale Coupon cost à sold a clicker This is a Variable or Unit Cost
- 54. A FIXED COSTEXAMPLE General Advertising We run radio ads, We attend trade shows Increases sales but can’t attribute our expenses to any specific unit sales. This is a Fixed Cost or Expense ?
- 55. VARIABLE VS. FIXEDCOSTS Variable Costs Direct Materials Direct Labor CAC Fixed Costs Corporate Expenses Rent Salaries Insurance Training Research It Depends Marketing Campaigns Shipping, Delivery Sales Commissions Utilities Scrap Recalls
- 56. EXAMPLE: TOTAL FIXEDCOSTS Add Salary, Marketing and Sales and other Fixed Expenses Category Expense Salaries $360K Rent, etc $190K Marketing $370K Total $K $920K
- 57. ALLOCATING FIXED COSTS Fortech companies, normally summarized as: M&S Marketing & Sales R&D Research & Development G&A General & Administrative
- 58. ZONES OF REASON Oncea company reaches “steady state”, you can compare expenses vs. industry norms. For tech companies, normally summarized as: M&S Marketing & Sales R&D Research & Development G&A General & Administrative Category Expense as % of Revenue Marketing & Sales 15% to 55% R&D 10% to 30% G&A 8% to 15%
- 59. EXAMPLE: SIMPLE ONE-PERIODP&L Assume we’ve sold 100K units… Gross Revenue: $1,600K (same as $1,600,000) COGS: - $700K Gross Profit: $900K Formatting Notes: 1. US uses period as a decimal point 2. Larger numbers always expressed as $K ($1000) or $M ($1000K)
- 60. UNITS SOLD àGROSS PROFIT Units Sold (K) 100K Average Selling Price (ASP) $16 Gross Revenue ($K) $1,600 Average Cost $7 COGS ($K) $700 Gross Profit ($K) $900 Step 1
- 61. GROSS PROFIT % ofrevenue shown for comparison vs. industry standard Results % Revenues $1,600 100.00% COGS $700 43.75% Gross Profit $900 56.75%
- 62. ADD EXPENSES By category Expressedas a positive number Results % Revenues $1,600 100.00% COGS $700 43.75% Gross Profit $900 56.75% Marketing & Sales $480 30.00% R&D $320 20.00% G&A $120 7.50% Total Expenses $920 57.5%
- 63. ONE PERIOD P&L OurClicker Business…!!! Here is everything lined up for one period Results % Revenues $1,600 100.00% COGS $700 43.75% Gross Profit $900 56.75% Marketing & Sales $480 30.00% R&D $320 20.00% G&A $120 7.50% Total Expenses $920 57.5% Net Profit ($20) -0.75%
- 64. ONE PERIOD P&L OurClicker Business…!!! Here is everything lined up for one period Are these good results? Results % Revenues $1,600 100.00% COGS $700 43.75% Gross Profit $900 56.75% Marketing & Sales $480 30.00% R&D $320 20.00% G&A $120 7.50% Total Expenses $920 57.5% Net Profit ($20) -0.75%
- 65. BUILDING THE FINALMODEL
- 66. STEPS TO BUILDAN PROFIT & LOSS STATEMENT 1. Build out Unit Economics 2. Build a timeline with assumptions 3. Use curves to build short-term model (12, 18 or 24 months) 4. Predict Year 5 model (within Zone of Reason) 5. Fill-in P&L and/or present graphs Benchmark vs. Competition Make sure everything passes “common sense” test .
- 67. REVENUE CURVES VARYBY MARKET TYPE Existing Market Re-Segmented Market New Market 1 2 3 4 5 6 7 1 2 3 4 5 6 7 1 2 3 4 5 6 7
- 68. PRIMARY BUSINESS MODELS Product TangibleSolution Design once, sell many Service Custom Solution Intangible Value Trade Connect Buyers and Sellers Product Service Trade
- 69. REVENUE CURVES VARYBY BUSINESS MODEL TYPE “Scalable” Product Service with Overhead Trade 1 2 3 4 5 6 7 1 2 3 4 5 6 7 1 2 3 4 5 6 7
- 70. REVENUE CURVES VARYAS A FUNCTION OF THE BUSINESS Sales Volume = Height Time to Market = Length Sales Growth = Slope
- 71. YOUR COSTS WILLVARY WITH TECHNOLOGY AND ECONOMIES OF SCALE Decreasing Costs Uncertain Costs Increasing Costs Technology Transportation LaborRaw Materials Regulations
- 72. YOUR COMPANY TIMELINE Q3Q1Q2 Q7Q6 Q8 Series B Company Starts First Production Full Production Series A Second Production Cost Reduction First Orders Seed Funding Q4 Q5 Employees: 6 10 14 18 22 25 29 33 50K/month Shipments
- 73. NEW COMPANY Introducing NewCo World’sbest Fidget spinners…!!! 74
- 74. STEP 1: BUSINESSASSUMPTIONS Revenue Model: A product, one-time sale Market Type: Re-segmented Market Marketing Strategy: B2C Sales Channel: Direct Sales over Web Costs: First production: $10 First 2 years $2.50 Declining costs over time
- 75. STEP 1: OPERATIONSAND TIME ASSUMPTIONS Production: Subcontract Manufacturing no factory required Time-to-Market: Takes 3 months to develop first prototypes Three months to sample customers Three months to first production
- 76. STEP 2: UNITECONOMICS Our unit is one spinner Unit Price: $6.00 Unit Cost: $2.50 Unit Profit: $3.50 Unit Margin: 58.3%
- 77. NEWCO UNIT PROFITOVER 2 YEARS Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Units Sold (K) 0 1 5 20 50 80 120 160 ASP $0 $0 $3 $6 $6 $6 $6 $6 Total $K $0 $0 $15 $120 $300 $480 $720 $960 Unit Cost - $10 $10 $5.00 $2.50 $2.50 $2.50 $2.50 COGS $K 0 $10 $50 $100 $125 $200 $300 $400 Gross Profit 0 ($10) ($35) $20 $175 $280 $420 $560 In this case: - Average Selling price starts at zero (product samples) and grows to steady state - Units ship in Q2, pre-production until Q5 - Unit costs high for first batch, steady state for Q5 and beyond
- 78. ADD EXPENSES BYDEPARTMENT Salaries and Fixed costs Research & Development (R&D) Research, Engineering and Development Sales & Marketing Promoting and selling product Operations Making and distributing product General & Administrative “Overhead” of corporate management, finance, legal, rent, etc.
- 79. NON-SALARY EXPENSES R&D Subcontractors andoutsourced engineering Non-depreciated tools, servers Marketing and Sales Trade shows Marketing campaigns Operations Subcontractors Facilities G&A Legal, IP, accounting expenses
- 80. ENGINEERING / R&D: DeptQ1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Headcount R&D 2 3 4 5 6 6 7 7 Salaries 50 75 100 125 150 175 200 250 Expenses Tools 10 10 10 10 20 20 20 20 Contractors 50 50 50 50 100 100 100 100 Travel 10 20 20 20 20 20 40 40 Expenses R&D $120 $155 $180 $205 $290 $315 $360 $410
- 81. MARKETING & SALES: DeptQ1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Headcount Mktg 2 3 4 5 6 7 8 9 Salaries 50 75 100 125 150 175 200 225 Expenses Campaigns 50 50 100 250 250 400 400 Contractors 50 50 50 50 100 100 100 100 Travel 10 20 20 20 20 20 30 30 Expenses Mktg $110 $195 $220 $295 $520 $545 $730 $755
- 82. OPERATIONS: Dept Q1 Q2Q3 Q4 Q5 Q6 Q7 Q8 Headcount Ops 2 3 4 5 6 7 8 10 Salaries 50 75 100 125 150 175 200 250 Expenses Subcontractors 10 10 10 10 15 15 20 20 Contractors 50 50 50 70 80 Facilities 10 20 20 20 20 20 40 40 Expenses Ops $70 $105 $130 $205 $235 $260 $330 $390 NOT ALL BUSINESSES WILL HAVE AN OPERATIONS TEAM
- 83. GENERAL & ADMINISTRATIVE: DeptQ1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Headcount G&A 1 2 3 4 5 6 6 Salaries 0 25 50 75 100 125 150 150 Expenses Legal 50 10 10 20 50 50 50 50 IP Filings 50 50 50 50 50 50 Travel 10 20 20 20 20 20 30 30 Expenses G&A $60 $55 $130 $165 $220 $245 $280 $280 EXECUTIVE, LEGAL, FINANCE, HR, ETC.
- 84. P&L FOR FIRST8 QUARTERS Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Units Sold (K) 0 1 5 20 50 80 120 160 ASP $0 $0 $3 $6 $6 $6 $6 $6 Total $K $0 $0 $15 $120 $300 $480 $720 $960 Unit Cost $10 $10 $5.00 $2.50 $2.50 $2.50 $2.50 COGS $K 0 $10 $50 $100 $125 $200 $300 $400 Gross Profit 0 ($10) ($35) $20 $175 $280 $420 $560 R&D $120 $155 $180 $205 $290 $315 $360 $410 S&M $110 $195 $220 $295 $520 $545 $730 $755 Ops $70 $105 $130 $205 $235 $260 $330 $390 G&A $60 $55 $130 $165 $220 $245 $280 $280 Expenses $360 $510 $660 $870 $1,265 $1,365 $1,700 $1,835 Net Profit ($360) ($520) ($695) ($850) ($1,090) ($1,085) ($1,280) ($1,275)
- 85. START TO BUILD5 YEAR P&L Why Five Years? Shows Business Potential Steady State growth rates, profitability Ability to compare with industry averages Fits within VC 10 year investment horizon An educated guess First Two Years Complete: Business under development Think about Year 5 86
- 86. THINK ABOUT YEAR5 Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 % Units Sold (K) 26 410 8200 ASP $5.95 $6 $6 Total $K $135 $2460 $49,200 100% Unit Cost 6.15 $2.50 $2.00 COGS $K 160 1025 16400 33% Gross Profit ($25) 1435 32800 67% R&D 660 1375 3540 7% S&M 820 2550 8360 17% Ops 510 1215 3430 7% G&A 410 1025 5800 12% Expenses $2,400 $6,165 $21,130 43% Net Profit ($2,425) ($4,730) $11,670 24%
- 87. THINK ABOUT YEAR5 Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 % Units Sold (K) 26 410 8200 ASP $5.95 $6 $6 Total $K $135 2460 $49,200 100% Unit Cost 6.15 $2.50 $2.00 COGS $K 160 1025 16400 33% Gross Profit ($25) 1435 32800 67% R&D 660 1375 3540 7% S&M 820 2550 8360 17% Ops 510 1215 3430 7% G&A 410 1025 5800 12% Expenses $2,400 $6,165 $21,130 43% Net Profit ($2,425) ($4,730) $11,670 24% Zone of Reason
- 88. FILL IN THEGAPS Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 % Units Sold (K) 26 410 2900 5250 8200 ASP $5.95 $6 $6 $6 $6 Total $K $135 2460 $17,400 $31,500 $49,200 100% Unit Cost 6.15 $2.50 $2.50 $2.25 $2.00 COGS $K 160 1025 7250 11813 16400 33% Gross Profit ($25) 1435 10150 19688 32800 67% R&D 660 1375 1740 2630 3540 7% S&M 820 2550 4420 6240 8360 17% Ops 510 1215 1760 2430 3430 7% G&A 410 1025 2175 3850 5800 12% Expenses $2,400 $6,165 $10,095 $15,150 $21,130 43% Net Profit ($2,425) ($4,730) $55 $4,538 $11,670 24%
- 89. IT’S A P&L…! In$K Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 % Revenue $135 2460 $17,400 $31,500 $49,200 100% COGS 160 1025 7250 11813 16400 33% Gross Profit ($25) 1435 10150 19688 32800 67% R&D 660 1375 1740 2630 3540 7% S&M 820 2550 4420 6240 8360 17% Ops 510 1215 1760 2430 3430 7% G&A 410 1025 2175 3850 5800 12% Expenses $2,400 $6,165 $10,095 $15,150 $21,130 43% Net Profit ($2,425) ($4,730) $55 $4,538 $11,670 24% $50M Business Losses for first two plus years Break even year 3 Unit costs dropping Steady State profitable Expenses within “Zone of Reason” Need to raise at least $7.2M
- 90. SIMPLIFIED FOR PRESENTATION in$M Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Revenue $0.1 2.5 $17.4 $31.5 $49.2 COGS 0.2 1.0 7.2 11.8 16.4 Gross Profit (.02) 1.4 10.1 19.7 32.8 Expenses 2.4 6.2 10.1 15.1 21.1 Net Profit ($2.4) ($4.7) $0.05 $4.5 $11.6
- 91. GRAPH IT..! Income statementsare the language of most finance professionals Graphic representations differ. Simplest: Break out Revenues and Net Profits Keep as periodic information, not cumulative. Year 1 Year 2 Year 3 Year 4 Year 5 Revenue 0 135 2460 17400 31500 49200 Profits 0 -2425 -4730 55 4538 11670 -10000 0 10000 20000 30000 40000 50000 60000
- 92. YOU DID IT..! Congratulations! You’rean amazing financial genius Get ready to present to the investors..!