HALO Academy 2 Minute Financial Drill: Financial Statements

Every Wednesday we release our all new “HALO Academy: 2 Minute Drill" by Integrity Square Founder & HALO Talks host, Pete Moore on everything you need to know for financial literacy, unit economics, legal documents used for M&A and capital raises, capital sources you can access, understanding how financings are structured, valuation metrics and parameters, and what you need to know about your own business before engaging in cap raises and/or a potential sale.

If you missed our email about this, you can re-read it here: https://mailchi.mp/9567da51c0ce/2025programschedule 
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RESOURCES 

• https://www.integritysq.com
  
  
• https://www.halotalks.com
  
  
• https://www.thehaloacademy.com  ===================================================

ABOUT YOUR INSTRUCTOR 

Pete is the Founder, Managing Partner and Chief Dream Architect at Integrity Square ("ISQ"), a leading boutique financial advisory firm focused on the $4.7T Health, Active Lifestyle, Outdoor ("HALO") sector. Since founding ISQ in 2010, the firm has played an active advisory role in 100+ mergers & acquisitions, private placements and advisory assignments across North America.

Pete Moore and his team have also invested in passionate entrepreneurs at HigherDOSE, XTEND, and Promotion Vault. ISQ's media and "live education" properties include HALO Talks, the leading B2B podcast in the sector, Time To Win Again, and the HALO Academy, an Executive Education Bootcamp Series. 

Prior to ISQ, Pete was Head of the Active Lifestyle & Wellness Group at Sagent Advisors (2003-2010.) Prior to 2003, Pete was co-founder of FitnessInsite, a SasS sales management platform with 1500+ clients (based in AZ.) At FitnessInsite, Pete invested his personal capital, leveraged his credit cards and learned what it takes to manage a startup.

Pete built his business and financial acumen on top of the foundation laid at three critical positions early in his career: Senior Associate at Brockway Moran & Partners, the private equity owner of Gold’s Gym International, Inc; worked as an Associate at Donaldson, Lufkin & Jenrette; and an Analyst at Chase Securities. (Now JP Morgan.) 

ISQ saw a need for a deeper & more useful level of education in the HALO sector. In response, we launched the HALO Talks podcast, with 500+ completed interviews and over 120,000 downloads. HALO Talks has become a “must listen” for anyone working or investing in the sector.

Pete graduated from Emory University (BBA, 1994) and received his MBA from Harvard Business School (1999.) While at HBS, he co-founded IRON PLANET, the leading B2B auction site for used heavy equipment, which was sold to Ritchie Bros for $758 million. His hobbies include: Football, basketball, tennis, podcasting, amateur ventriloquism, pro bono DJ and fitness enthusiast.

Episode Transcript

(00:00):
This is Pete Moore, Halo Academy one zero one,
two minute drill. Today, we're gonna be talking about financial
statements. So when I come up to you and I say, hey,
love your business, would like to invest in it, Could you send me
your financial statements? Okay? What are those three things
and what do I need to worry about before I hand them over to

(00:22):
someone? One is your income statement. Okay? Your income
statement is your revenue minus your expenses,
minus your taxes, minus your interest. Okay? And it's gonna get
down to something called net income. Okay? Our income
statement is effectively a scorecard
for what we have done over the season. And the

(00:44):
season is an annual year. So January
1 to December 31 is my income statement
for 2024. Okay? That includes every
day of sales, every day of expenses, and it's going to
lead into a profit or a loss. If you're a
business and you're looking to sell your studio or your club,

(01:06):
we're gonna focus on your club level or your studio
level EBITDA and cash flow, which is a different number
than your net income. You're never gonna value your business based on your net
income and we'll explain that in a later drill. What's
important next is your balance sheet. And your balance sheet is basically
your selfie of your business on the day that I flash

(01:28):
that report. Okay? It's gonna have all the cash on your balance
sheet, which is in your checking account. It's gonna have all the receivables
that people owe you money. It's also gonna have assets of what you
bought and what you have in the ground, construction
wise, and it's gonna also have goodwill for things that you've
potentially purchased. And your balance sheet has liabilities

(01:50):
of how much money you owe to your vendors and how much money you owe
to your bank and how much money you potentially owe or have sold to your
investors. That is your income statement and balance sheet. And there's
a cash flow statement that then turns into a
differential between what you actually got in cash and what
you made in operating profit, and we're gonna go through that on a later

(02:13):
drill. But financial statements are three things, income
statement, balance sheet, and cash flow statement. And make sure someone looks at
them before you send them out.