From 068fb81658a29d09ec6f87a8236cb968d5efef3d Mon Sep 17 00:00:00 2001 From: ronny abraham Date: Tue, 19 Nov 2024 22:24:49 +0200 Subject: [PATCH] started cash flow statement --- mba/ch34.org | 48 ++++++++++++++++++++++++++++++++++++++++++++++++ 1 file changed, 48 insertions(+) diff --git a/mba/ch34.org b/mba/ch34.org index 5bd8324..5217219 100644 --- a/mba/ch34.org +++ b/mba/ch34.org @@ -61,3 +61,51 @@ - payroll - long term + +** Cash Flow +- tells you about your income + - top line is sales / revenue + - bottom line is net income + +*** Financial Summary + +The following is a fictional summary of a the finances of a watch company + +**** Gross Profit +| Category | Quantity | Per Unit | Total | +|----------------+----------+----------+--------| +| Sales | 1000 | $300 | $300k | +| Cost | 1000 | $200 | -$200k | +| **Gross Profit** | | | **$100k** | + +**** Earnings Before Interest and Taxes (EBIT) +| Expense Type | Amount | +|------------------------------+----------| +| Marketing expenses | -$10k | +| Employee expenses | -$30k | +| Rent expense | -$17k | +| Depreciation | -$2k | +| **EBIT** | **$41k** | + +**** Earnings Before Taxes (EBT) +| Item | Amount | +|-----------------+----------| +| Interest | -$1k | +| **EBT** | **$40k** | + +**** Net Income +| Item | Amount | +|-----------------+----------| +| Taxes (25%) | -$10k | +| **Net Income** | **$30k** | + + +*** Explanation of the Financial Summary + +1. *Gross profit*: the monty you bring in taking away only the cost of manufacture +2. *Earnings Before Interest and Taxes (EBIT) / Operating Profit* + - this is also called "The Line" + - this composes operating expenses and depreciation + - depreciation is the wear and tear on your equipment + - in the US you can deduct that cost + - this means you can deduct from the use of even a car