Cash Flow Statement
Small Business Owners consider this their most important report.

 

Inflow:_
Income from providing childcare $10,000_

Outflow:_
House payment plus taxes $8,600_

Net Balance: $1,400_

You have a positive cash-flow of $1,400 per year.

Cash-Flow Cycle: Starts when
money is spent; ends when
money from prodcut or service
sold is received.

 

In this case your home is an
Asset because it creates positive
cash flow and a place to live.

Your home may also become
more valuable over time which
would provide additional income
if you choose to borrow against
the equity in your house.

However, real estate can also
lose value making your house
worth less than you owe.


Bill are paid with cash, not profit.

__Inability to pay bills is why most__
small businesses go bankrupt.

You must have enough cash on-hand
to pay bills even if you do not have
income flowing in.

Major creditors quickly foreclose on
a small business.

 

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