BU121 Chapter Notes - Chapter 5: Init, Income Approach, Cashis
Document Summary
Owners equity is an accumulation of profits, its not a pot of cash its conceptual its not real. Cash is the most important thing cash is king . Took that helps forecast and manage cash flows. Look in your pocket and see how much cash you have right now and coming in (cash available. Subtract anything you need to spend money on. > but dont make assumptions of when youre going to get paid count what you actually have! *for new venture, look at typical industry numbers* Deficiency: need to finance the deficiencyend balance is the minimum required. Excess>minimum: surplus is available to pay borrowing, so the ending balance is the minimum required + any surplus left that you didnt use on repayment. In the cash budget, don"t include your ask, only your own investment. > in the total financing required thats where you come up with your ask. Build: how quickly you build cash through sales.
