Hello, this is Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing.

A financial model provides three outputs.

Key financial statements, an operational cash-flow forecast, and key metrics for the business.

Key financial statements include the profit and loss statement (called P&L), the balance sheet (BS), and the cash-flow statement (CF).

The P&L shows revenue matched with costs and indicates whether or not you are profitable over a period of time.

It can be used to compare different time periods such as this year versus last year or this quarter versus last quarter.  

It’s often used to compare the actual results with the budget. 

The balance sheet shows the company’s assets — what it owns and liabilities — what it owes.  This is a snapshot in time. 

The balance sheet must always be in balance so the difference between assets and liabilities is shareholder equity (assets = liabilities + equity).

The cash-flow statement shows cash inflows and outflows over a period of time. 

Key metrics include gross margin, profit margin, cash runway, and more. 

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.
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Hall T Martin is the director of Investor Connect, which is a 501(c)(3) nonprofit dedicated to the education of investors for early-stage funding. All opinions expressed by Hall and podcast guests are solely their own opinions and do not reflect the opinion of Investor Connect. This podcast is for informational purposes only and should not be relied upon for the basis of investment decisions.