1. Mr. Bernstein Managing Your Finances, pp 457-465 May 2017
Entrepreneurship
Mr. Bernstein
Managing Your Finances, pp
May 2017

2. Entrepreneurship Mr. Bernstein
Pro Forma Cash Flow Statement
Becomes a budget tool:
Must have a sales forecast
Must include estimates of all expenses
Comparison with results highlights areas where changes may need to be made
Must include entries for capital expenses
Helpful in developing Pro Forma Balance Sheet

3. Entrepreneurship Mr. Bernstein
Cash Flow Statement and Budgeting
Controlling costs: Variable vs. Fixed Expenses
AKA “marginal” and “sunk” costs
Airlines: Example of High Fixed Expenses
Large upfront costs, pure profit after reaching breakeven point
Farmer’s Market: Example of High Variable Expenses
Low upfront costs, profit from markup on each item
What type of expenses are favored by Startup Entrepreneurs?