lumireqora
Real stories and practical insights about keeping businesses solvent. We write about what actually works when managing cash flow and understanding your company's financial position.
Most business owners I've met can recite their revenue figures instantly. But ask about their quick ratio? That's where things get quiet. Here's the thing—liquidity isn't just some accounting buzzword. It's about knowing if you can cover next month's bills without scrambling.
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Solvency analysis sounds intimidating. I get it. But understanding your debt-to-equity position is probably the most honest conversation you can have about your business's future. And honestly? It's less complicated than you might think.
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I once spent three days building a cash flow model that predicted everything perfectly—except reality. Turns out, the best forecasts aren't about precision. They're about understanding patterns and being ready when things shift. Let me show you what actually helps.
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There's a specific feeling that comes with watching your working capital shrink. It's like seeing storm clouds gather when you're halfway through a bushwalk. You might be fine, but you'd really like to know where the nearest shelter is. Here's how to read those clouds.
Keep readingAfter years of helping Australian businesses understand their financial position, some patterns become pretty clear. These aren't rules—more like observations that might help.
The businesses that survive downturns aren't necessarily the most profitable ones. They're the ones that spotted trouble three months before it arrived. Current ratio dropping below 1.5? Your suppliers might notice before you do. Setting up simple monitoring takes an afternoon, but it can give you weeks of extra planning time.
Most Perth businesses have some seasonality, even if they don't think they do. Tourism, construction, retail—they all follow patterns. Once you map your cash flow against the calendar, you stop being surprised by the same "unexpected" shortage every July. It's kind of liberating, actually.
Stock sitting on shelves looks like an asset on paper. But if it's not moving, it's cash that isn't available for payroll or rent. We've seen companies technically solvent but practically broke because too much capital was tied up in slow-moving inventory. The fix usually involves uncomfortable conversations about clearing old stock.
That invoice from 60 days ago? Its real value drops every week it stays unpaid. Not just because of the time value of money—because the likelihood of collecting it decreases. Companies that stay on top of collections aren't being pushy; they're being realistic about what their accounts receivable are actually worth.
Financial Analyst
Spent 12 years in corporate finance before realizing small businesses needed the same analytical tools—just explained differently. Now focuses on making solvency analysis accessible to owners who don't have accounting degrees.
Business Advisor
Works primarily with Perth manufacturers and distributors on liquidity management. Has a particular interest in how supply chain disruptions affect working capital—learned that the hard way during 2020.