Anyone who likes to trade cryptocurrencies and wants to win in the market needs a good platform. Without a reliable platform, taking advantage of the best opportunities in the cryptocurrency market is impossible. Professionals always use the best resources.
Traders use tools that stand out. Today, several resources are available for trading, but the question remains: what are the main resources, and which help the most with cryptocurrencies? We look at the best tools that can help you master numbers in the space.
Financial Statements
Financial statements provide a snapshot of a corporation's or an individual's financial health, giving insight into performance, operations, and cash flow. Financial statements are essential since they provide information about the revenue, expenses, profitability, and debt of a firm or an individual.
In the real sense, financial statements tell a story. Therefore, your ability to dissect and tell that story can often be the difference between success and failure.
There are three main financial statements:
Income Statements- They mainly answer the question, "are you profitable?" One can determine if they are profitable using the formula; Revenue – Expenses = Profit
Balance Sheet- This type answers the question, "are you healthy? "One can use the formula; Assets = Liabilities + Equity or Assets - Liabilities = Equity
Statement of Cash Flow- This answers the concern on how Cash has been spent over a while. The main formula to determine cash flow; Net Increase/Decrease of Cash during period+ Cash at the beginning of the period = Cash at the end.
Cash Flow Forecast
All businesses, including crypto, should have a cash flow forecast. It helps you "see around the corners" before things go bad. The cash flow forecast should be set at a particular time.
The time set should be enough to react and avoid problems you would have realized too late.
Cash flow forecasting is important because it enables businesses to make informed strategic decisions by having an accurate picture of what their cash position looks like in the future.
Revenue Projections
Till now, we understand that the crypto market is so volatile. Revenue projections help us look at revenue growth. As such, we understand past trends, economic trends, executed contracts, and new potential contracts.
Besides, no projection is perfect, but it leaves one more prepared for all potential outcomes.
A Budget
A budget helps create financial stability. As such, a budget puts a person on a stronger financial footing for both the day-to-day and the long term.
When creating a budget, try to:
Look at the last year's expenses
Identify what will repeat and what will not.
Think about plans; what new expenses will you have?
Strategic Plan
A strategic plan can enable you to track progress toward goals. Business is a grind; as such, there is a need to be intentional about stepping on different platforms.
A strategic plan is essential as it helps you look into the future, create a plan, and start working on it.
Final Thoughts
The ability to combine different tools in the crypto space can, most of the time, have positive outcomes. The market can sometimes be volatile, and such tools' support can keep you from being lost.
However, in any way, try to do your research before venturing into any crypto investment or project.
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