Introduction

To determine with a reasonable degree of accuracy whether your business can return to profitability, you need to master two essential spreadsheet tools: a profit and loss forecast and a cash flow analysis. If you haven't prepared these yet, it's high time you learned. (Good news: It's not hard.)

Why do you need both of these tools? Basically, because they tell you different things. The P&L forecast is a very useful long-term management tool, which you can use to predict your business's viability six months or a year into the future. But it doesn't give you a picture of how and when money comes in and out of your business. A P&L could show that you were making a profit while your bank account was below empty. So it's also essential that you accurately track cash using a cash flow analysis.

More on making a plan. If you want more detailed step-by-step help, complete with far more detailed explanations and examples, check out How to Write a Business Plan, by Mike McKeever (Nolo).

Talk to a Lawyer

Need a lawyer? Start here.

How It Works

  1. Briefly tell us about your case
  2. Provide your contact information
  3. Connect with local attorneys

Legal Information & More from Nolo

NOLO-web1:DRU1.6.8.23.20160804.41205