Financial Statements for Startups: Essential Tools and Techniques

Balance Sheet

Balance sheet is a financial statement that shows the assets, liabilities, and equity of a company at a specific point in time. This statement provides a snapshot of a company's financial position.

Income Statement

An income statement is a financial statement that shows the revenues, expenses, and profits or losses of a company over a specific period of time. This statement helps startups measure their financial performance.

Cash Flow Statement

A cash flow statement shows the inflows and outflows of cash for a company over a specific period of time. This statement helps startups understand their cash position and cash flow trends.

Burn Rate

Burn rate refers to the rate at which a startup is spending its cash. This metric is critical for startups to track to ensure they have enough cash to keep the business running.

Runway

Runway refers to the length of time a startup has before it runs out of cash. This metric is important for startups to track to ensure they have enough cash to reach key milestones.

Lifetime Value of a Customer

The lifetime value of a customer is the amount of revenue a company expects to receive from a customer over their lifetime. This metric helps startups understand the long-term value of their customer base.

Return on Investment

Return on investment is a measure of the return generated by an investment. This metric helps startups assess the profitability of their investments.