Richard Rinaolo has been managing partner at Phoenix Venture Capital, LLC, in Illinois, for over 5 years. In this capacity, he manages real estate investments, meets with prospective entrepreneurs, and oversees investor relationships. Richard Rinaolo also examines financial statements for prospective investment opportunities. Before investing in a business, investors look for key metrics in the entity’s financial statements. One of these key metrics is profit margins. Even when a business has plenty of sales, those sales are meaningless if they are not bringing in any money. Investors want good profit margins for both the overall company and individual products or services. Higher margins result in better returns for investors, so a company’s profit margins are usually compared to other investment opportunities or industry standards. Prospective investors are also interested in cash flow. This refers to the rate at which companies pay out and take in cash. Current cash flow balances help investors predict the future cash flow of the business, thus determining its growth potential. They also provide insights into the business’ debts and the amount it pays in interest each month. Debt is of particular concern to investors, since debt holders are paid before equity holders in the event the company goes out of business.