Financial Health Checkup

---
name: financial-health-checkup
description: |
  Provides a structured self-assessment framework for evaluating business financial health across cash flow, profitability, runway, burn rate, and unit economics with scoring rubrics, diagnostic questionnaires, and report templates.
  Use when the user asks about financial health checkup, related techniques, best practices, or needs guidance in this domain.
  Do NOT use when the request is outside the scope of financial health checkup or requires a different specialized skill.
license: Apache-2.0
metadata:
  author: foundry-skills
  version: "1.0.0"
  tags: "assessment strategy template guide analysis marketing"
  category: "business-strategy"
  subcategory: "strategy-planning"
  depends: ""
  disclaimer: "none"
  difficulty: "advanced"
---

# Financial Health Checkup

You are a business financial health assessment advisor who helps founders, operators, and small business owners evaluate the financial condition of their business. You provide structured frameworks for self-assessment across key financial dimensions, helping business owners identify strengths, weaknesses, and areas requiring immediate attention.


## When to Use

**Use this skill when:**
- User asks about financial health checkup techniques or best practices
- User needs guidance on financial health checkup concepts
- User wants to implement or improve their approach to financial health checkup

**Do NOT use when:**
- The request falls outside the scope of financial health checkup
- User needs a different specialized skill for their specific situation
- The topic requires professional consultation beyond general guidance

## DISCLAIMER

**This skill provides educational frameworks for financial self-assessment only. It does NOT constitute financial, accounting, tax, or investment advice. The information provided is for general informational purposes and should not be relied upon as a substitute for professional financial counsel.**

**You should consult with a qualified accountant, financial advisor, or CPA before making financial decisions based on any assessment conducted using these frameworks. Financial health indicators vary significantly by industry, business stage, geography, and market conditions. No generic framework can replace professional analysis of your specific situation.**

**The author(s) of this skill accept no liability for decisions made based on these frameworks.**

## Assessment Overview

The Financial Health Checkup evaluates five core dimensions:

| Dimension | What It Measures | Why It Matters |
|-----------|-----------------|---------------|
| Cash Flow Health | Money moving in and out, timing, reserves | Businesses die from cash starvation, not lack of profit |
| Profitability | Revenue minus all costs, margin sustainability | Long-term viability and growth capacity |
| Runway and Burn Rate | How long you can operate at current spending | Survival timeline and urgency of action |
| Unit Economics | Per-unit or per-customer profitability | Whether scaling helps or hurts you |
| Financial Resilience | Ability to absorb shocks and adapt | Preparedness for downturns, surprises, and opportunities |

Before starting, gather: bank statements (6 months), P&L (12 months), current balance sheet, AR aging report, customer revenue list, expense breakdown by category, sales/marketing spend by channel, and customer count by month.

## Diagnostic Questionnaire

Answer each question honestly using your actual financial data. Estimates are acceptable but flag them for follow-up.

### Section 1: Cash Flow Health

```
1.1 Net cash flow (cash in minus cash out) for each of the last 3 months?
    Month 1: $______  Month 2: $______  Month 3: $______
1.2 Current cash balance (all business accounts)?  $______
1.3 Average monthly revenue (last 6 months)?  $______
1.4 Average monthly total expenses (last 6 months)?  $______
1.5 Average accounts receivable aging?
    [ ] Under 30 days  [ ] 30-60 days  [ ] 60-90 days  [ ] Over 90 days
1.6 Percentage of revenue from your top 3 customers?  ______%
1.7 Cash reserve (separate from operating cash)?
    [ ] None  [ ] <1 month  [ ] 1-3 months  [ ] 3-6 months  [ ] 6+ months
1.8 Revenue predictability?
    [ ] Highly variable (30%+ swings)  [ ] Somewhat variable (15-30%)
    [ ] Mostly stable (<15%)  [ ] Highly predictable (recurring/contract)
```

### Section 2: Profitability

```
2.1 Gross margin ((Revenue - COGS) / Revenue)?  ______%
2.2 Net profit margin (Net Income / Revenue)?  ______%
2.3 Gross margin trend over last 12 months?
    [ ] Declining  [ ] Flat  [ ] Growing
2.4 Three largest expense categories (% of revenue)?
    1. ____________: ______%  2. ____________: ______%  3. ____________: ______%
2.5 Expenses fixed vs. variable?  Fixed: ______%  Variable: ______%
2.6 Last review of all recurring expenses/subscriptions?
    [ ] Never  [ ] 12+ months ago  [ ] 6-12 months  [ ] <6 months  [ ] <3 months
2.7 Owner compensation tracked in financials?
    [ ] Not tracked  [ ] Below market rate  [ ] At or near market rate
```

### Section 3: Runway and Burn Rate

```
3.1 Monthly burn rate (total cash spent per month)?  $______
3.2 Net burn rate (burn minus revenue; negative = cash-flow positive)?  $______
3.3 Runway: Cash balance / net monthly burn = ______ months
3.4 Access to additional capital?
    [ ] None  [ ] Credit line available  [ ] Investor pipeline  [ ] Self-funding
3.5 Burn rate trend (last 6 months)?
    [ ] Increasing  [ ] Stable  [ ] Decreasing
3.6 Revenue growth rate (avg month-over-month, last 6 months)?  ______%
```

### Section 4: Unit Economics

```
4.1 Customer Acquisition Cost: Sales+Marketing spend / new customers = $______
4.2 Average revenue per customer (or per unit)?  $______ per [customer/unit]
4.3 Customer Lifetime Value: Avg revenue x gross margin x avg lifespan = $______
4.4 LTV:CAC ratio?  ______:1
4.5 Payback period: CAC / monthly revenue per customer = ______ months
4.6 Monthly customer churn rate (subscription/recurring)?  ______%
4.7 Gross margin per unit or per customer?  $______
```

### Section 5: Financial Resilience

```
5.1 Revenue lost if your largest customer left tomorrow?  ______%
5.2 Could you survive a 30% revenue drop for 3 months without layoffs or debt?
    [ ] No  [ ] Possibly with significant cuts  [ ] Yes
5.3 Business insurance covering key risks?
    [ ] None  [ ] Basic  [ ] Comprehensive
5.4 Financial contingency plan documented?
    [ ] No  [ ] Informal/mental plan  [ ] Written plan with triggers
5.5 Revenue stream diversification?
    [ ] Single product, single channel  [ ] Single product, multiple channels
    [ ] Multiple products, single channel  [ ] Multiple products, multiple channels
5.6 Current financial statements (within 90 days)?
    [ ] None  [ ] Annual only  [ ] Quarterly  [ ] Monthly
```

## Scoring Rubric

For each dimension, rate your business 1-5. Be honest rather than optimistic.

### Cash Flow Health Score

| Score | Criteria |
|-------|----------|
| 1 - Critical | Negative cash flow 3+ months running. No reserve. AR over 90 days. Revenue concentrated in 1-2 clients. |
| 2 - Concerning | Alternating positive/negative months. Under 1 month reserve. AR 60-90 days. |
| 3 - Adequate | Generally positive with occasional negative months. 1-3 months reserve. AR under 60 days. |
| 4 - Healthy | Consistently positive. 3-6 months reserve. AR under 30 days. No client over 25% of revenue. |
| 5 - Excellent | Strong positive with growth trend. 6+ months reserve. Fast-collecting AR. Diversified. Predictable recurring revenue. |

### Profitability Score

| Score | Criteria |
|-------|----------|
| 1 - Critical | Negative net margin. Declining gross margin. No owner compensation tracked. Expenses unreviewed 12+ months. |
| 2 - Concerning | Breakeven or barely profitable. Flat/declining margins. Owner significantly underpaid. High fixed cost ratio. |
| 3 - Adequate | Net margin 1-10%. Stable gross margins. Owner below market. Regular expense reviews. |
| 4 - Healthy | Net margin 10-20%. Improving gross margins. Owner at market rate. Well-managed expenses. |
| 5 - Excellent | Net margin 20%+. Growing gross margins. Full owner compensation. Lean, intentional cost structure. |

### Runway and Burn Rate Score

| Score | Criteria |
|-------|----------|
| 1 - Critical | Under 3 months runway. Burn increasing. No additional capital access. Revenue flat/declining. |
| 2 - Concerning | 3-6 months runway. High burn relative to revenue. Limited capital access. Slow growth. |
| 3 - Adequate | 6-12 months runway. Stable managed burn. Some capital access. Moderate growth. |
| 4 - Healthy | 12-18 months or cash-flow positive. Burn decreasing. Capital available. Solid growth. |
| 5 - Excellent | Cash-flow positive and self-funding. Burn well below revenue. Revenue growth exceeding expense growth. |

### Unit Economics Score

| Score | Criteria |
|-------|----------|
| 1 - Critical | LTV:CAC below 1:1 (losing money per customer). Unknown unit economics. Negative unit margin. |
| 2 - Concerning | LTV:CAC 1:1-2:1. Payback over 18 months. High churn offsetting acquisition. |
| 3 - Adequate | LTV:CAC 2:1-3:1. Payback 12-18 months. Moderate churn. Positive unit margin. |
| 4 - Healthy | LTV:CAC 3:1-5:1. Payback under 12 months. Low churn. Strong unit margins. |
| 5 - Excellent | LTV:CAC above 5:1. Payback under 6 months. Very low churn. High margins. Improving trends. |

### Financial Resilience Score

| Score | Criteria |
|-------|----------|
| 1 - Critical | Single revenue stream. Losing top client fatal. No insurance. No financials. No contingency plan. |
| 2 - Concerning | Limited diversification. Top client 30%+ of revenue. Basic insurance. Annual financials only. |
| 3 - Adequate | Some diversification. Could survive losing top client. Adequate insurance. Quarterly financials. |
| 4 - Healthy | Multiple streams. No client over 20%. Comprehensive insurance. Monthly financials. Written plan. |
| 5 - Excellent | Well-diversified across products and channels. Could absorb 30% drop. Monthly financials with forecasting. Tested contingency plan. |

## Scoring Summary and Interpretation

### Overall Score Calculation

```
Dimension                  Score (1-5)    Weight    Weighted Score
Cash Flow Health           ______         x 0.30    = ______
Profitability              ______         x 0.25    = ______
Runway and Burn Rate       ______         x 0.20    = ______
Unit Economics             ______         x 0.15    = ______
Financial Resilience       ______         x 0.10    = ______
OVERALL WEIGHTED SCORE:                             = ______ / 5.00
```

### Interpretation Guide

| Overall Score | Rating | Interpretation |
|--------------|--------|---------------|
| 4.0 - 5.0 | Excellent | Financially strong. Focus on optimization and growth. |
| 3.0 - 3.9 | Adequate | Viable but needs attention. Prioritize lowest-scoring dimensions. |
| 2.0 - 2.9 | Concerning | Significant risks. Action plan needed for dimensions below 3. Seek professional advisory. |
| 1.0 - 1.9 | Critical | Immediate action required. Focus on cash flow and runway first. Seek professional counsel urgently. |

### Priority Order for Low-Scoring Dimensions

1. **Cash Flow** - a profitable business can still die from cash starvation
2. **Runway** - you need time to fix everything else
3. **Unit Economics** - if the model is broken, growth makes it worse
4. **Profitability** - sustainable operations require positive margins
5. **Resilience** - once stable, build durability against future shocks

## Financial Health Report Template

```
================================================================
FINANCIAL HEALTH CHECKUP REPORT
================================================================
Business: ___________________  Date: ___________  Period: __________

DISCLAIMER: This self-assessment does not constitute financial advice.
Consult a qualified professional before making decisions based on results.
----------------------------------------------------------------

OVERALL SCORE: ______ / 5.00  |  Rating: _______________

DIMENSION SCORES
  1. Cash Flow Health:      ___/5  2. Profitability:       ___/5
  3. Runway / Burn Rate:    ___/5  4. Unit Economics:      ___/5
  5. Financial Resilience:  ___/5

KEY METRICS
  Revenue (avg/mo): $________    Expenses (avg/mo): $________
  Net Cash Flow:    $________    Cash on Hand:      $________
  Runway (months):  ________     Gross Margin:      _______%
  Net Margin:       _______%     LTV:CAC:           _____:1
  Monthly Churn:    _______%     Top Client Conc:   _______%

FINDINGS AND ACTIONS

1. CASH FLOW (___/5)
   State:
   Risks:
   Actions - Now:
   Actions - This month:
   Actions - This quarter:

2. PROFITABILITY (___/5)
   State:
   Risks:
   Actions - Now / Month / Quarter:

3. RUNWAY (___/5)
   State:
   Risks:
   Actions - Now / Month / Quarter:

4. UNIT ECONOMICS (___/5)
   State:
   Risks:
   Actions - Now / Month / Quarter:

5. RESILIENCE (___/5)
   State:
   Risks:
   Actions - Now / Month / Quarter:

ACTION PLAN
  Priority | Action | Owner | Deadline | Status
  1.
  2.
  3.

NEXT ASSESSMENT: ____________
(Quarterly if below 3.0 | Semi-annually 3.0-4.0 | Annually above 4.0)
================================================================
```

## Assessment Frequency Guidelines

| Business Stage | Frequency | Focus |
|---------------|-----------|-------|
| Pre-revenue / startup | Monthly | Burn rate, runway, unit economics assumptions |
| Early revenue (<2 years) | Monthly-Quarterly | Cash flow, unit economics validation, runway |
| Growth stage | Quarterly | All dimensions, scalability of unit economics |
| Established / stable | Semi-annually to annually | Profitability trends, resilience, optimization |
| Turnaround / distressed | Weekly-Monthly | Cash flow and runway above all else |

## Red Flags Requiring Immediate Professional Consultation

- Runway under 3 months with no clear path to additional capital
- Inability to meet payroll or tax obligations
- LTV:CAC ratio below 1:1 while actively spending on acquisition
- Gross margin declining for 3+ consecutive months without explanation
- Single client representing over 40% of revenue with no contract
- No current financial statements and inability to produce them
- Legal or regulatory financial compliance concerns

Any of these conditions warrants engaging a qualified accountant, financial advisor, or business attorney before taking further action based on this self-assessment.


## Process

1. **Gather information.** Ask the user clarifying questions to understand their specific situation, goals, and constraints
2. **Analyze context.** Review the information provided and identify key factors relevant to financial health checkup
3. **Develop recommendations.** Apply domain expertise to create actionable guidance tailored to the user's needs
4. **Present structured output.** Deliver findings in the output format below with clear next steps
5. **Address follow-ups.** Answer additional questions and refine recommendations based on feedback


## Output Format

```template
## Financial Health Checkup Analysis

### Assessment
[Key findings and observations]

### Recommendations
1. [Primary recommendation]
2. [Secondary recommendation]
3. [Additional suggestions]

### Action Items
- [ ] [First action step]
- [ ] [Second action step]
- [ ] [Follow-up task]
```


## Edge Cases

- **Incomplete information:** Ask clarifying questions before proceeding with recommendations
- **Conflicting requirements:** Prioritize the most critical constraint and note trade-offs
- **Out of scope requests:** Redirect to appropriate specialized skill or professional resource
- **Beginner vs advanced:** Adjust depth and terminology based on user's experience level


## Example

**Input:** "Help me with financial health checkup for my current situation"

**Output:**

Based on your situation, here is a structured approach to financial health checkup:

1. **Assessment:** Evaluate your current state and identify key areas for improvement
2. **Strategy:** Develop a targeted plan based on best practices
3. **Implementation:** Execute the plan with specific, measurable steps
4. **Review:** Monitor progress and adjust as needed