Startup Death Valley Curve

The startup valley of death curve or startup J curve plots the cash balance of a business against time. A lean startup business can be identified by the shape of its curve during the bootstrapping period.

Startup Death Valley Curve June 15th, 2018Team
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Links Between Financial Statements in a Business Plan

The financial projections template produces an income statement, balance sheet and cash flow statement for the business. These 3 financial statements appear initially to be unconnected; however, closer investigation shows that they are linked and a change in one statement substantially impacts the other statements. The entrepreneur need to understand these connections in order to be able to understand the financial performance of the business.

Links Between Financial Statements in a Business Plan June 6th, 2018Team
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Understanding Cash Flow Statements in Startups

An understanding of the cash flow statement allows the startup entrepreneur to manage the cash flow of a business effectively. In doing so they will avoid many of the cash flow problems which can damage or even destroy what would have been a successful startup operation.

Understanding Cash Flow Statements in Startups July 18th, 2018Team
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Discounted Cash Flow Valuation Calculator

The free cash flow valuation calculator can be used to value the operations of a startup up business. The calculator uses the free cash flow generated by the business and discounts this at its weighted average cost of capital.

Discounted Cash Flow Valuation Calculator October 19th, 2016Team
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Estimate New Capital

New equity capital is included in the cash flow statement of the projection as a positive figure as it represents cash flowing into the business from investors. For example, if in year two the plan inject new capital of 5,000 to finance the purchase of new machinery, the figure of 5,000 should be included in the cash flow statement on the proceeds from the issue of new share capital line.

Estimate New Capital October 5th, 2016Team
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Cash Flow vs Profit

A business needs to understand that there is a difference between profit and cash. Eventually a business needs to be able to make a profit, however, providing it is properly financed and has adequate cash flow a business can survive for a considerable period of time without profits.

Cash Flow vs Profit September 25th, 2018Team
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Cash Conversion Cycle Calculator

The cash conversion cycle calculator works out the number of days in the cash cycle of a business. It estimates the level of inventory, accounts receivable, and accounts payable needed for a given level of trading operations and determines the funding required to finance working capital.

Cash Conversion Cycle Calculator October 5th, 2016Team
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Cash Conversion Cycle Calculation

All businesses have a cash conversion cycle, it is the time in days between paying for inventory and receiving the cash from the sale of that inventory from customers. The cash conversion cycle formula can be used to calculate the number of days.

Cash Conversion Cycle Calculation September 25th, 2018Team
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Cost of Trade Credit Financing

When early payment discounts are offered by suppliers, the cost of trade credit needs careful consideration as the effective interest rate can be very high compared to other forms of finance.

Cost of Trade Credit Financing October 23rd, 2017Team
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Cost of Offering Early Payment Discount

The cost of offering early payment discount to customers needs careful consideration by a startup business as the effective annual rate is normally very high compared to other sources of finance.

Cost of Offering Early Payment Discount October 23rd, 2017Team
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Free Cash Flow

Free cash flow is the cash flow available after the business has paid for all of its operating needs including providing working capital, and invested in property, plant, and equipment (capital expenditure) necessary to maintain its current growth rate.

Free Cash Flow October 5th, 2016Team
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