Know what the business can fund
Your ownership goals describe the time, cash flow and wealth you want. Sustainable Financials connects those goals to the company’s actual results and a supported plan.
Your numbers need to help you make decisions. These three milestones connect reliable history, a funded annual plan and a five-year view of the ownership outcome. The finance lead prepares and maintains the numbers. You examine the trade-offs and make the decisions.
Three milestones, three different questions
| Milestone | The owner’s question | What completion establishes |
|---|---|---|
| M10: Three-Statement Financial Model | Why did profit and cash differ, and can I trust the explanation? | Reviewed connected history, supported earnings adjustments, a reliable close and package, and an actual owner review. |
| M11: Month-by-Month Annual Budget | Can the coming year’s plan support the business and my goals? | A complete monthly build, supported cash and payments, actual adoption, checked transfer and continuing comparison. |
| M12: Five-Year Forecast & Valuation | Where does this path lead, and what should we change? | Supported forward statements, the three value views, a comparable goal gap, scenarios and an actual ownership conclusion. |
Each milestone has five owner actions and its own 0–3 requirements. Existing suitable work counts. Receiving a model does not automatically install the whole module. A newly adopted budget can be complete before January, and a reviewed forecast can be complete while still showing a gap to your goal.
Read profit, position and cash together
The income statement explains performance over a period. The balance sheet shows what the company owns and owes at a date. The cash flow statement explains the movement from beginning cash to ending cash.
A company can earn more revenue while its customers take longer to pay. It can report profit while buying equipment or repaying principal. Those choices affect the amount available for reinvestment and distributions. Connected statements make the causes visible.
Normalized EBITDA helps explain earnings after supported adjustments. It is not a bank balance or an automatic distribution amount. Salary pays for operating work; distributions are ownership cash. Keep the definitions and tax bases consistent when comparing them with your goals.
Begin with the model you actually have
If the foundation is missing, the finance lead gathers, investigates and reconciles the history. If you have an older model, review and adapt it. If you have a current reviewed model, maintain it and examine the remaining evidence.
Keep one company financial project and one current set of source files. The ongoing model and annual budgeting workbook have different jobs within that system. Preserve original records, adopted comparisons and qualified financial-review conclusions. Company assumptions belong to the company; teaching-case figures are not substitutes for missing inputs.
You do not need to become the spreadsheet builder. You do need to understand the questions, challenge unsupported assumptions and approve the choices that affect your ownership future.
Use the same financial work throughout your Playbook
Monthly: close the accounts, distribute the package and review the result, explanation and next commitment. The five CFO dashboard groups are payroll, net income, Normalized EBITDA, working capital and cash, supported by the full statements.
Quarterly: compare the forecast with your goals, test alternatives and use the evidence to choose the next Game Plan.
Annually: develop the coming year’s operating plan, test cash and goal trade-offs, adopt the exact budget and roll the longer forecast from that supported foundation.
The financial-function assessment and the leader’s readiness assessment remain separate from the owner’s milestone scores. You can begin improving the practice with the people already carrying these responsibilities.
The Owner’s Playbook keeps the current financial work in The Numbers, goals and priorities in The Plan, responsibilities in Your Leadership Team, and dated reviews in The Rhythm.
Choose your next step
Review the wider system. The Ownership Assessment helps you review this capability beside your ownership goals and the other milestones. Keep missing evidence visible and choose the work that matters next.
Connect the work with support. The 90-Day Boardroom Blueprint brings ownership direction, the financial foundation and decisions into a first usable Playbook. You can explore that support directly; completing the Assessment is not a prerequisite.
← Module 3: Owner’s Playbook · Start M10: Three-Statement Model →