This is only the second full month of Neualtenburg financial operation, so one of the great tools of financial management, looking at trends, isn't available to us yet. But there are some very useful bits to be gained, nonetheless. Here, at the usual spot, are the two financial statements:
http://www.tospitimou.com/Neualtenburg/BalanceSheet.pdf
and
http://www.tospitimou.com/Neualtenburg/IncomeExpense.pdf
The most important thing that's happened this past month is that we've started to see a regular income, mostly from our Monthly Fees, but even from some smaller items as well. Look at the Income/Expense report, at the first column of numbers, which is just the numbers for the month of July. In the section called Revenues, you'll see:
37,079 Property Revenues (these are the Monthly Fees)
2,649 Casino Net Revenues (this is the increase in the Uma avatar account, which is probably mostly casino income)
3,275 Miscellaneous revenues (these are Paypal cash-back fees and System dividends to the Rudeen avatar account)
----
43,003 Total Revenues
So, that's actually pretty exciting. Real revenues, for the first time in Neualtenburg history! I mean, "real", as in, serious amounts. These are certainly not the first revenues on the Neualtenburg books.
Of course, the bad news is that it's still short. The monthly fee to the Lindens was 50,257, and with other fees and charges, the total was
-----
53,527 Total Expenses
For a shortfall of 10,524.
Well, it is certainly a good start. There is absolutely no question about what we need to do now. Get more members! There is still plenty of land available. New members mean additional revenues from the monthly fees, and it is absolutely essential that we achieve a "better than balanced" budget soon. Remember, we may be a government. But like most governments in RL, we can't print money.
So, considering that we're still running in the red, let's look at the Balance Sheet, and see how we're doing with cash. Obviously, if you run in the red for too long, the cash will run out.
As I explained last month, the Balance Sheet is a far more esoteric report than the Income/Expense Report. But, understood simply, it's a statement of everything we own (basically, cash and land) minus everything we owe (basically, the cash which was put up by several helpful people so that the sim could be bought).
Well, the Balance Sheet has good news and bad news. The good news is that we still have plenty of cash. L$121,627, to be exact (on July 31). If the payment to the Lindens is about 50,000, that's about two and a half months of sim payments to the Lindens. Thats good.
The bad news is that we still owe more than we own. In fact, here's where you can see the fundamental connection between the Balance Sheet and the Income/Expense Report. You may recall (I'm sure you don't, but I'll remind you
) that at the end of June the "Net Worth" (called Equity on the Balance Sheet) was -99,334. Meaning, we owe 99,334 L$ more than we own. As you can see, this month the figure is -110,823 L$. And, voila! The difference, the amount that it's worse, is exactly the bottom line on the Income/Expense Report. Because we lost L$ 10,524, our "Net Worth" is L$ 10,524 worse.I think you can see how important it is that we get new members, and therefore new revenues. We can certainly sustain losses for a few more months; we do have a healthy cash balance. But unless we can turn around the worsening "Net Worth" by generating a "profit" each month, we'll ultimately run out of money.
Not meant to scare anyone. This is a pretty reasonable looking "start up" financial statement. But it's really important that we understand that more monthly revenues are essential. We must not only turn the corner to positive monthly revenues; we must also get to the position of at least a neutral "Net Worth". When that happens, whew! That will be celebration time!
As usual, any questions, PLEASE ask. My role is to help make the finances make sense.
Sudane
