Week 10 Reading Reflection

      This week's reading was centered on "financial preparation for entrepreneurial ventures" as per it's title. This chapter was focused on the necessary documents that essentially validate an entrepreneurial venture. These documents are financial statements including the cash-flow, income statements as well as the balance sheet. In establishing an entrepreneurial venture there are specific statements needed in order to organize the companies finances and for budgeting purposes. The two things that surprised me the most include "break-even" analysis. As an entrepreneur I would feel that the ability to break-even after any investment is necessary to feel safe in taking any risk starting with being aware of the initial costs before one can make profit to determine sales revenue. The other thing that I found interesting were the different examples of ratio analysis such as vertical and horizontal analysis which are used for identifying strengths and weaknesses and positive and negative trends respectively. The most confusing financial statement that was mentioned were the pro forma statement. I didn't really understand how balance sheets could work as a method to forecast the future changes of the budget. This was tied into "cash-flow" which is the concept I have the most questions on for the author. I would ask the author to explain how loan's affect cash flow in a different way. Also I would ask the author to compare how cash flow might differ across different cultures such as in countries where cultures still use bride price or if that wouldn't have any affect at all.