This PPT slide, part of the 81-slide How to Prepare a Business Plan PowerPoint presentation, presents a framework for understanding the application of financial planning instruments, focusing on 3 key financial statements: the cash flow statement, income statement, and balance sheet. Each section addresses critical questions relevant to financial health and decision-making.

The first question, "Can I fulfill my financial obligations at any time?" relates to the cash flow statement. This statement tracks deposits and payments, providing insights into liquidity. The emphasis here is on liquid funds, underscoring the importance of maintaining sufficient cash flow to avoid bankruptcy due to illiquidity.

Next, the slide poses the question, "Am I profitable?" This is linked to the income statement, which details proceeds and expenses, ultimately leading to profit or loss. Understanding profitability is essential for assessing operational efficiency and long-term viability.

The final question, "Where has my capital been invested, and where has it come from?" pertains to the balance sheet. It outlines assets, equity, and liabilities, offering a snapshot of financial position. This section highlights the sources of capital, distinguishing between equity and outside capital. It also notes potential causes of bankruptcy, specifically excessive debt, which can arise when equity is insufficient.

Overall, the slide serves as a concise guide for executives to evaluate their financial standing through these 3 instruments. It emphasizes the interconnectedness of cash flow, profitability, and capital structure, which are crucial for informed decision-making and strategic planning.

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