ReadOS / Business
Business Finance and Financial Statements — Part 1
Reading statements, understanding cash flow, profit, valuation and financial decisions.
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- 01Accounting for investments in other companies: influence decides the methodOwning shares in another company can be reported three very different ways. How the level of influence decides between fair value, the equity method and consolidation, in Australia and the US.
- 02After the peak: what happens when a bubble burstsWhen a bubble bursts, falling prices, distressed borrowers, cautious banks and wary consumers can turn a market correction into a recession. How the bust unfolds and how recovery comes.
- 03Asset acquisition or business combination: why the accounting differsA side-by-side guide to how the same purchase is recorded as an asset acquisition or a business combination: cost allocation, transaction costs, goodwill and the effect on future profits.
- 04Before you buy: challenge the need, then judge the whole-life commitmentThe cheapest and greenest purchase may be the one you avoid. How to test whether a need can be removed, shared or met by repair, then compare remaining options on whole-life cash flows.
- 05Bubbles, strong currencies and capital flowsMost bubbles come with a strong currency or a flood of foreign money. Why capital inflows and asset booms reinforce each other, how they reverse, and what it means for importers and exporters.
- 06Build in the right order: problem, prospect, people, product, positioning, process, profit and purposeWhy many business problems come from doing things out of sequence, and an eight-step order for building or fixing a business, from the customer's problem through to scaling, profit and purpose.
- 07Building a brand on a small budget: product first, trust, community and creative consistencyHow small businesses build strong brands without big advertising budgets: a product worth talking about, kept promises, umbrella branding, creative consistency, community and purposeful publicity.
- 08Building a business that outlasts its founder: thinking big, asset-light growth, professional management and renewalHow owners build enduring businesses: escaping busyness, thinking big about value, asset-light growth, bringing in professionals, sharing ownership, acting as custodian and renewing.
- 09Building a high-performing sales team: accountability, trust and empowermentStrong sales teams rest on a few durable values and habits. What accountability, tenacity, trust and empowerment look like in practice, and how leaders create the conditions for them.
- 10Buying a business in Australia: what the accounting means for buyersA practical guide for business owners planning an acquisition: how deal terms flow into the accounts, from due diligence and purchase price allocation to earn-outs, goodwill and post-deal reporting.
- 11Buying a business or buying assets? The business test explainedWhether an acquisition counts as buying a business changes the accounting completely. What inputs, processes and outputs mean, how the concentration test works, and worked examples.
- 12Buying for the whole life of equipment: spares, support and supplier dependenceA purchase ends at handover, but you live with it for years. How to plan spares, maintenance, documentation, skills, software and supplier dependence before you sign the order.
- 13Chase customers, not investors: prove unit economics first, then choose between debt and equityWhy capital follows businesses that have proven customers and unit economics, how to start with little capital through partnerships and customer funding, and ten questions for choosing debt or equity.
- 14Checking a preferred supplier before award: due diligence on the people, money and capacity behind a tenderA strong tender shows a supplier can describe good delivery. Due diligence checks whether it can deliver: its entity, finances, key people, subcontractors, systems and capacity.
- 15Choosing a business structure in Australia: sole trader, partnership, company or trustStructure shapes control, personal exposure, tax, paperwork and what happens when owners change. How to compare the four common structures, avoid myths and know when to revisit it.
- 16Choosing between quotes: decide how you will judge before the offers arrivePrice is visible, value is not. How to set the decision rule, gates and weights before quotes arrive, compare whole-of-life cost, treat close scores as ties and invite alternatives fairly.
- 17Choosing the right co-founder: complementary skills, shared vision, fair equity and agreements that prevent disputesHow to find and choose a co-founder: why complementary skills matter, deciding equity fairly, defining roles, testing compatibility, vesting and shareholder agreements, and what investors look for.
- 18Competitive strengths or common ones: testing what actually earns a priceReliability and responsiveness keep you in the game but rarely win it. How to test which strengths customers pay for, fund common ones only to par and find the costs that eat profit.
- 19Consistency beats a single great yearWhy ten years of steady, rising earnings tell you far more than one record result, and how to separate a business's real earning power from one-off gains.
- 20Consolidated financial statements: reporting a group as one businessHow a parent and its subsidiaries are combined into one set of accounts: adding line by line, eliminating the investment and intra-group dealings, recognising goodwill and non-controlling interests.
- 21Cost reports and cash flow tell different stories: watching both on projectsA project can be on budget while draining cash, because cost reports record work done and cash records money moved. How to bridge the two and find your peak cash need early.
- 22Cost-benefit analysis for business decisions: a practical method with a worked equipment exampleHow to compare all the costs and benefits of a decision, including hidden, opportunity and intangible ones, then test it with payback, NPV and sensitivity, using a worked machine purchase.
- 23Credit: the fuel behind every bubbleMost damaging bubbles are financed with borrowed money. How lending, new lenders, low real interest rates and rising debt turn a boom into a bubble, and why credit makes the bust worse.
- 24Customer lifetime value, acquisition cost and retention: the numbers behind sustainable growthHow to calculate customer lifetime value and customer acquisition cost, measure retention and churn, compare repeat and referral businesses, and grow customer value through the loyalty ladder.
All chapters preserve the original KEVOS Insights content. These topic-based reading collections are organised alphabetically; chapters may be read in any order.
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