056 - Financial Statements Made Easy - Statement of Cash flows
In the final episode of our Financial Statements Made Easy series, we’re talking about the statement of cash flows. This financial statement answers your most burning question: Where did my cash go? Listen to find out how to read your statement of cash flows and how to use it to make better decisions and more money.
Show Notes
3 reasons you could have a profit but no cash. (6:19)
What if you DO have cash, but you’re NOT profitable? (8:11)
How does collecting old receivables affect your view of how profitable you are? (11:35)
Why cash is king. (13:13)
What is the statement of cash flows? (15:34)
What does your statement of cash flows look like? (20:13)
How do you use your statement of cash flows? (26:12)
Story Time: A real client who used the statement of cash flows to figure out where her money was going. (27:34)
Take action! Go print out your statement of cash flows and try it out! (29:55)
Quotable Moments
“Cash flow just means the money that’s coming in and going out of your business.” — M
“Cash flow and profit are equally important, but they’re not the same thing. They affect each other, but it’s possible to make a profit and not have any money.” — M
“If you don’t have cash, if you don’t have liquidity in some respect, you can’t do business.” — K
“Before you even think about going and looking at the statement of cash flows, make sure that you have good books.” — K
“The reason to understand in sufficient detail where your cash went and where it comes from is that if you know that, you can do something about it.” — M
“Just look for the big numbers and if they’re negative, go fix them.” — M
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