In this lesson, you will learn the foundations of financial reporting. This lesson focuses on the difference between profit and cash and how to spot it in your financial statements. Financial statements are a reporting of what has happened in the past. Successful business owners need to be able to understand the past, while preparing and forecasting the future. Cash is the lifeblood of the business, and in this lesson, we will explore the reason why.

Lesson objectives:

1. Understand what is meant by liquidity and why cash is king.
2. Introduction to the 3 primary financial statements businesses use and how they connect to cash.
3. Understand how a cash flow statement is built and how to interpret the results.

This lesson will discuss the core components of cash flow. The following statistics show how critical it is for small businesses to focus on cash flow:

In order for your business to stay healthy, you must become a financial doctor for your business where you analyze your financial position in the past to understand trends, so you are ready for the future.

The analysis points out areas where there may be current or potential problems. It is somewhat fruitless to decide where you want to go until you have determined where you have been and where you are now.

This analysis is a quick, efficient tool for you to use in becoming familiar with the historical financial operation of your company. It is a framework for identifying the causes and severity of financial and management problems. When you act in your business, you can feel confident that the action is the right one.

Lesson objectives:

1. Learn about the Initial Financial Indicators (IFI) for your business to spot trends in your business
2. Learn the most important way to manage your cash flow via expense control and the relationship between Operating Expense and Gross Profit
3. Diagnose the causes for any financial or management problems that results are pointing to.
4. Build solutions to improve your company’s health based on what you find.
5. Build a financial dashboard you can use in your company with CashFlowTool.

The goal of this lesson is to bring your financial statements to life and minimize the guess work about why it doesn’t seem to be going in the right direction. Use this lesson as part of your monthly measurement of your financial reports.

In an economy where the stakes are increasingly high and cash progressively scarce, business owners must proactively manage the balance sheet and income statement or risk falling victim to the five silent killers of cash flow.

Did you know that a majority of businesses that file bankruptcy reported a net profit, yet had negative cash flow? Often the warning signs that a company is in trouble go unnoticed until it is too late. A business can improve their liquidity and create long-term viability by looking closely at the following potential trouble spots.

Lesson objectives:

1. Identify the things you’re doing that might be robbing your business of cash.
2. Understand the difference between short- and long-term debt and when each should be used.
3. Learn how managing the critical drivers of cash flow puts more money in your pocket.

Understanding business cash flow essentials is job #1 for your business and this course taught you the deep fundamentals of understanding cash flow and how to forecast the future. You have been given a special discount to the best tool on the market for managing and forecasting your cash flow – CashFlowTool.

We hope you really put these business essentials into practice as we want your business to thrive today and tomorrow. Be a cash flow pro in your business and good luck!