Ridgeline Landscaping is a fictitious Australian trades business — a sole trader who starts out doing cash landscaping jobs, then wins genuinely good commercial contracts, hires staff, buys equipment, and takes on the working-capital strain that comes with growing a trades business quickly. It was created as BusinessSolvency's primary demonstration case because its story is one that any sole trader, partnership, or small company owner will recognise: nothing about the decisions looks like a mistake, and the business is still quietly running out of room.
Ridgeline is not a failing business, on paper. It makes a profit in every one of the six years in this story — Net Income never once turns negative. Revenue grows from $192,000 to $265,000 to $305,000 in the first three years. An owner reading only the profit and loss statement would see nothing but good news.
Underneath, two things are draining the bank account at the same time. The first is the owner's own drawings: in FY2026, Owner Drawings of $50,476 are almost three times that year's $17,294 Net Income, and they stay above profit for three years running. The second is tax timing: because FY2025 was a strong year, FY2026 brings both the balance of FY2025's tax and a full year of PAYG instalments based on it: $49,416 paid to the ATO in a year whose own tax bill turns out to be nil. Commercial customers also take a little longer to pay every year — Debtor Days stretch from 19 to 22 to 25 — adding a smaller strain on top. The business bridges the gap the only way available to it: the bank account runs into overdraft, from a positive $34,000 at the end of FY2025 to −$34,807 a year later.
Why a trades business — and why a sole trader
Trades and landscaping were chosen because the pattern is universally recognised — a small operator wins bigger contracts than they've handled before, and everyone involved treats it as unambiguous good news, right up until the cash timing catches up with them.
Sole trader was chosen deliberately, because BusinessSolvency's first audience is sole traders and partnerships — businesses trading without a separate company at all (see Chapter 2, Section 2.1). For a sole trader the tax line in this chapter is the owner's own personal income tax on the business profit, set aside from the business account, at the individual rates for each year (with the Medicare levy and the Low Income Tax Offset). Owner Drawings, unlike a company dividend, isn't limited by the year's profit — nothing stops an owner drawing several times a thin year's earnings, exactly as happens here. The danger is not a legal one. It is a purely practical one, which makes it, if anything, easier to miss.
What the analysis shows
FY2025 is the base year, and it tells a genuinely healthy story on every measure. Revenue of $192,000 generates Gross Profit of $132,000. After rent, fuel, insurance, professional fees, other overheads and $5,000 of depreciation, profit before tax is $106,000. The owner's personal income tax on that profit is $24,708 at the FY2025 individual rates, set aside from the business account — leaves Net Income of $81,292.
The balance sheet is simple and clean: $34,000 in the bank, Debtors of $9,863, equipment of $15,000 (gross), and no debt at all. The only significant liability is the $24,708 of tax not yet paid — it falls due after the tax return is lodged, in FY2026. Current Ratio is 1.47. Owner Drawings of $65,000 are 80% of profit — a level this year's earnings can support.
DSCR has nothing to measure this year — not because the business is extraordinarily strong, but because there is no debt to service yet. That says nothing about how the business would cope once debt, heavier drawings, and the following year's tax arrive — which is exactly what happens next.
What an owner using BusinessSolvency sees in FY2025
All key indicators are green, and genuinely so. The recommended action is routine monitoring. But this is also the year a careful owner — or their accountant — would look one step ahead: a strong first year means next year's PAYG instalments will be set on this year's tax, at the same time as this year's tax bill itself falls due. That cash needs to be planned for now.
What the analysis shows
FY2026 looks like exactly what it is on paper: rapid, genuine growth. Revenue climbs 38% to $265,000 as commercial contracts land, and the wage bill arrives at $88,333. Net Income is much thinner, at $17,294, but still positive. Because that profit sits below the tax-free threshold, the owner's own tax for FY2026 is nil.
The cash flow tells a very different story, and it has four parts:
- The tax double hit: $49,416. The $24,708 balance of FY2025's tax falls due, and the ATO also collects PAYG instalments through the year based on FY2025's tax — another $24,708. Both are paid in a year whose own tax turns out to be nil, so the instalments come back as a refund — but not until FY2027.
- Owner Drawings: $50,476, still set close to FY2025's level, against this year's $17,294 profit.
- Equipment: $70,179. Paid for with a $28,393 equipment loan and $41,786 of the owner's own money put into the business.
- Working capital. Debtors grow from $9,863 to $15,973 (Debtor Days 19 to 22) and stock of $5,048 is bought, only partly offset by more time to pay suppliers.
Net Operating Cash Flow is −$13,283 — the tax payments alone turn it negative — and the bank account ends the year at −$34,807, an overdraft. Current Ratio falls below 1 for the first time, to 0.96, with the overdraft now shown as a debt to the bank under Current Liabilities. DSCR, measured on operating cash after tax, reads −2.01x: the business's trading cash this year did not cover its loan repayments at all. The Sustainable Cashflow test, which counts the year's own tax rather than the double hit, fails too — revenue was $42,162 short of the $307,162 needed to cover every cash payment, Owner Drawings included.
The balance sheet carries one item worth noticing: an Income tax refund due of $24,708, a genuine asset — the ATO owes the owner the instalments paid on a nil tax year. It will turn into cash, but only after the FY2026 return is lodged. The overdraft has to carry it until then.
What an owner using BusinessSolvency sees in FY2026
Closing cash, Current Ratio and DSCR all turn pink together, even though Net Income is positive and revenue has grown 38%. The recommended actions: set Owner Drawings against this year's actual profit rather than last year's habit; ask the accountant to vary the PAYG instalments as soon as it is clear the year's profit has fallen (Section 8.9); confirm the new debtor terms were priced into the contracts; and watch cash monthly rather than waiting for year-end. This is the year an owner relying only on the profit and loss statement sees a growing business — and an owner using BusinessSolvency sees the cash problem the same day the figures are entered.
What the analysis shows
FY2027 is Ridgeline's best revenue year yet, at $305,000, growth of 15.1% — and Net Income rises to $30,260 after $1,778 of the owner's tax. The $24,708 tax refund from FY2026 arrives, and with no instalments due on a nil-tax prior year, Net Operating Cash Flow swings to a healthy $78,057. The overdraft narrows to −$17,750.
But the drawings habit hasn't changed. Owner Drawings of $52,740 are 174% of this year's profit. The refund has simply paid for another year of drawing more than the business earns. Total Equity — the owner's stake in the business — falls to $10,080, its lowest point in the story, despite the $41,786 the owner put in the year before. Debtor Days stretch again, to 25, and Current Ratio slips to 0.80.
DSCR reads a strong 12.31x — the refund genuinely lifted this year's operating cash, and DSCR counts it. The Sustainable Cashflow Breakeven test does not: it counts each year's own tax, not last year's refund, and it counts the owner's drawings. On that basis FY2027 fails — revenue of $305,000 is $18,986 short of the $323,986 needed for all cash in to equal all cash out. Closing cash, Current Ratio and Total Equity agree with it: the business is still overdrawn, and the owner's stake is being eaten away by drawings.
What an owner using BusinessSolvency sees in FY2027
The Annual Solvency Report scores the business 41/100, "High Stress — Action Required", driven by the negative closing cash, the Breakeven shortfall and Current Ratio, even with DSCR green (Section 8.12). The recommended actions are immediate: bring Owner Drawings down to what the year's profit supports, tighten debtor terms, and move to quarterly reviews on the Quarterly Forecast & Review page. A one-off refund is not a fix — it is the moment to make one.
What the analysis shows
FY2028 is the first forecast year and the deliberate turning point. Growth slows to 10% (5.8% after 4% inflation), Net Income rises 61% to $48,679, and Owner Drawings of $54,900 — last year's $52,740 plus inflation — come back to 113% of profit, down from 174%. Every cost line now rises at least with inflation. The platform’s reserve policy would now suggest a first Cashflow Reserve of $12,904 (one month of business costs), but the bank is overdrawn, so nothing goes into a reserve yet and the owner is not asked to put money in for one: debts are paid first, as lenders, creditors and accountants would expect (Chapter 4).
Even so, the overdraft deepens again, to −$21,556. Drawings are still above profit, the owner's tax is back ($3,557 paid as instalments and last year's balance), and loan repayments continue. Current Ratio is 0.68.
DSCR reads a comfortable 10.29x. Run the same year against the Sustainable Cashflow Formula, though, and FY2028 fails it: the business needs $351,522 of revenue to cover every cash outflow, against $335,500 planned — a $16,022 shortfall (Section 8.10). It is the only forecast year that fails Breakeven, and with no reserve yet it keeps Ridgeline's 3-Year Sustainable Cashflow badge at "Not yet sustainable".
What an owner using BusinessSolvency sees in FY2028
DSCR reads green, but the Breakeven page shows a real shortfall and the bank account is still overdrawn. The recommended action is not to relax because DSCR looks strong — it is to lift prices, hold drawings to what the business earns, pay the overdraft down before building a reserve, and treat the Breakeven shortfall as the more urgent signal this year, because it tests whether all cash in covers all cash out, not just debt service.
What the analysis shows
FY2029 is where the plan has to work harder. With wages, rent and overheads all rising with inflation, Ridgeline lifts revenue 12% — about 7.7% after inflation, mostly through price rises — and Net Income grows 33% to $64,676. Owner Drawings rise only with inflation, to $57,100, and are now 88% of profit — below profit at last, a level the business can genuinely sustain. The days follow our rule for planning them: customers are asked to pay 5 days faster each year, from 25 days in FY2027 to 20, 15 and then 10, towards Ridgeline's 6-day terms; suppliers stay at 21 days while the bank is overdrawn or the year misses Breakeven, because such a year cannot afford to pay them sooner.
The overdraft narrows to −$9,673. The bank is still overdrawn, so the reserve still waits: every spare dollar goes to the overdraft first. Current Ratio improves to 0.80, Total Equity rises to $11,435, and DSCR reaches 15.85x. The Sustainable Cashflow test passes by $27,178 — 7.2% of revenue. The trading problem is fixed; the cash takes another year to catch up.
What an owner using BusinessSolvency sees in FY2029
Breakeven, Current Ratio and DSCR have all turned; cash has not yet. The recommended action is to keep the discipline going: make sure the price rises hold with customers, keep collecting from customers 5 days faster each year, clear the overdraft so the reserve can start, and keep drawings rising no faster than inflation until the bank balance is genuinely positive.
What the analysis shows
FY2030 closes the loop. Revenue grows another 12% to $420,851 — more than double FY2025's starting point — and Net Income of $81,801 is Ridgeline's strongest result, earned on a business carrying real staff, real equipment, and real commercial contracts. Customers now pay in 10 days and, with the bank out of overdraft, suppliers are paid in 16, and Owner Drawings of $59,400 are 73% of profit.
The overdraft is cleared for the first time since FY2025 — the bank closes at exactly $0 — and Total Equity reaches $49,553. Current Ratio is 2.33, DSCR 14.54x, and the Sustainable Cashflow surplus is $22,268 — 5.3% of revenue. With the bank finally in credit, the reserve can start: $29,892 goes into the Cashflow Reserve in one year, a first step towards the three-month target of $41,350 (the buffer that would absorb a lost contract, a slow quarter, or the owner's own illness). The reserve takes only the cash to spare, so the bank never goes back into overdraft to fund it.
Nothing about this recovery required shrinking the business or abandoning growth. It did require three things: prices rising ahead of inflation, drawings rising no faster than inflation while profit grows, and the owner putting money back in to build the reserve once the overdraft was cleared: $15,717 in FY2030, on top of the $41,786 put into equipment in FY2026. The crisis years were an owner-drawings and tax-timing problem, not a trading problem — and the recovery builds real protection against the next shock as well as fixing the one that already happened.
What an owner using BusinessSolvency sees in FY2030
Breakeven, Current Ratio and DSCR are green and cost headroom is 8.6%, but the recovery is thin: a bank balance of $0 does not cover the $8,059 of ATO obligations still owing at year end, and the reserve is still $11,458 short of its target. The 3-Year Sustainable Cashflow badge still reads "Not yet sustainable" — because the test looks at all three forecast years: FY2028 fell short of Breakeven, and FY2028 and FY2029 could build no reserve while overdrawn. That is deliberate: one more strong year, with the reserve topped up, is what earns the badge. The recommended action is quarterly monitoring, a plan with the ATO for the tax owing, and an early conversation each year with the accountant about the tax instalments.
How PAYG instalments work for a growing sole trader
A sole trader's income tax is not paid as the profit is earned. After the first tax return, the ATO sets PAYG instalments for the following year, based on the tax in the return just lodged. So in the year after a strong year, the owner pays two things: the balance of last year's tax, and instalments towards this year's tax — both worked out from last year's profit. If this year's profit falls, the instalments are too high, and the excess comes back as a refund only after this year's return is lodged.
BusinessSolvency models exactly this. The Cash Flow Statement shows the line Income tax: tax less tax paid, the Balance Sheet shows any balance owing as ATO Obligations — or, when too much has been paid, an Income tax refund due as an asset.
What it cost Ridgeline
| Year | Owner's tax for the year | Paid to the ATO in the year | Owed (refund due) at 30 June |
|---|---|---|---|
| FY2025 | $24,708 | $0 | $24,708 owing |
| FY2026 | $0 | $49,416 | $24,708 refund due |
| FY2027 | $1,778 | −$24,708 (refund received) | $1,778 owing |
| FY2028 | $8,360 | $3,557 | $6,582 owing |
| FY2029 | $16,100 | $14,942 | $7,740 owing |
| FY2030 | $24,159 | $23,840 | $8,059 owing |
In FY2026 Ridgeline paid $49,416 to the ATO in a year whose own tax was nil. That single line is almost as large as the year's Owner Drawings ($50,476), and on its own it turns Net Operating Cash Flow negative.
The lesson for accountants
An owner can vary their PAYG instalments when they expect this year's tax to be lower than last year's. Had Ridgeline's accountant varied the FY2026 instalments to nil once the year's thinner profit was clear, $24,708 would have stayed in the business and the FY2026 overdraft would have been about −$10,099 instead of −$34,807. (Varying too low carries ATO penalties, so the variation must be based on a genuine estimate — here, the year's tax really was nil.)
This is exactly the kind of conversation BusinessSolvency is built to start early. A forecast entered at the start of the year shows the tax cash, not just the tax expense — and an accountant reviewing it quarterly can see the instalment problem months before the bank balance does.
Passing the profit test is not the same as passing the cashflow test
Net Income is positive every year of this story. Running the same years against the Sustainable Cashflow Formula — All Cash IN must equal or exceed all Cash OUT, tested by the revenue a year needs for its cash change to reach zero, the same test the platform's Breakeven page runs live — tells a different story. Ridgeline fails it three years running — FY2026, FY2027 and FY2028 — even though profit is positive in all three, DSCR reads 12.31x and 10.29x in the last two, and a tax refund lifts the bank balance in FY2027. It passes again only once drawings come back below profit.
| Year | Revenue | Sustainable Cashflow Target | Surplus / (Shortfall) | As % of Revenue |
|---|---|---|---|---|
| FY2025 | $192,000 | $172,988 | $19,012 | +9.9% |
| FY2026 | $265,000 | $307,162 | ($42,162) | −15.9% |
| FY2027 | $305,000 | $323,986 | ($18,986) | −6.2% |
| FY2028 | $335,500 | $351,522 | ($16,022) | −4.8% |
| FY2029 | $375,760 | $348,582 | $27,178 | +7.2% |
| FY2030 | $420,851 | $398,583 | $22,268 | +5.3% |
FY2025–FY2027 are actual years, shown on the Breakeven page's Actual years view and on the Annual Solvency Report; FY2028–FY2030 are forecast years, on its Forecast years view. Both use exactly the same test. The Breakeven test counts each year's own tax rather than the instalment timing, so a refund or a double hit never flips a verdict on its own.
Why do FY2026 and FY2027 fail? Owner Drawings of $50,476 and $52,740 against profits of $17,294 and $30,260 — no trading result at that level can cover drawings that size. Why does FY2028 still fail? It is the year the business starts doing the right things — paying its loan, restarting tax instalments, holding drawings to inflation — while Owner Drawings are still above profit. Those are genuine cash outflows, and $335,500 of revenue isn't enough yet to cover them. By FY2029, with prices rising ahead of inflation and drawings down to 88% of profit, the surplus returns.
The practical lesson: the Sustainable Cashflow test caught the problem in every year that DSCR missed it. In FY2027 a one-off refund lifted DSCR to 12.31x and narrowed the overdraft; in FY2028 profit rose 61% and DSCR read 10.29x. Both years still failed the test, because both years the owner drew out more than the business earned. A strong DSCR, a refund, or a rising profit is not the end of the check.
Why this matters more for a sole trader
A larger business can absorb one bad year inside a bigger cash base. Ridgeline's FY2028 shortfall of $16,022 is 33% of that year's Net Income. This is why the Cashflow Reserve matters so much for a business of this size — and why it is worth noticing that Ridgeline cannot build one until FY2030, because an overdrawn business pays its debts first. The reserve built in FY2030 is what would carry the next shortfall year without a return to the overdraft.
This is the single most important mechanical idea in the Ridgeline story: Net Income and cash in the bank are not the same thing. Three things separate them here — how much the owner draws out relative to what the business earns, when the tax is actually paid, and how fast customers pay — with Owner Drawings the one the owner controls most directly.
Owner Drawings is a financing cash flow — it comes out after Net Income has been earned, and it isn't limited by that year's profit the way a company dividend legally would be. FY2026 and FY2030 sit at opposite ends of the story and show the same lever moving in opposite directions.
| Year | Net Income | Owner Drawings | Drawings as % of Profit |
|---|---|---|---|
| FY2025 | $81,292 | $65,000 | 80.0% |
| FY2026 | $17,294 | $50,476 | 291.9% |
| FY2027 | $30,260 | $52,740 | 174.3% |
| FY2028 | $48,679 | $54,900 | 112.8% |
| FY2029 | $64,676 | $57,100 | 88.3% |
| FY2030 | $81,801 | $59,400 | 72.6% |
Debtors, Creditors and Inventory add a second, smaller layer. When Debtors rise, cash is going out the door as unpaid invoices rather than into the bank; a rising balance owed to suppliers works the other way. Debtor Days and Creditor Days turn those balances into comparable figures: what customers owe against sales, and what your business owes suppliers against its purchases from them (11.9):
| Year | Debtor Days | Creditor Days |
|---|---|---|
| FY2025 | 19 | 17 |
| FY2026 | 22 | 21 |
| FY2027 | 25 | 21 |
| FY2028 | 20 | 21 |
| FY2029 | 15 | 21 |
| FY2030 | 10 | 16 |
This is the Sustainable Cashflow Formula in its most concrete form: All Cash IN must equal or exceed all Cash OUT. A profit and loss statement can only ever show one side of that equation. Owner Drawings, tax payments, Debtors, Creditors and Inventory are where the other side lives — and BusinessSolvency shows them automatically, every year.
The table below shows all six years side by side.
| Year | Net Income | Closing Cash | DSCR | Current Ratio | Total Equity |
|---|---|---|---|---|---|
| FY2025 | $81,292 | $34,000 | No debt | 1.47 | $23,956 |
| FY2026 | $17,294 | −$34,807 | −2.01x | 0.96 | $32,560 |
| FY2027 | $30,260 | −$17,750 | 12.31x | 0.80 | $10,080 |
| FY2028 | $48,679 | −$21,556 | 10.29x | 0.68 | $3,859 |
| FY2029 | $64,676 | −$9,673 | 15.85x | 0.80 | $11,435 |
| FY2030 | $81,801 | $0 | 14.54x | 2.33 | $49,553 |
Read across any single row and Ridgeline looks like a normal, profitable trades business — Net Income never once goes negative. Read down the Closing Cash and Current Ratio columns and the real story appears: four years in overdraft, three of them with Current Ratio below 1, followed by a steady recovery built on prices rising ahead of inflation and Owner Drawings — the lever that caused most of the problem — held to what the business earns. FY2026 is the year DSCR catches it too; FY2027 and FY2028 are the years it doesn't. That gap between the row-by-row story and the column-by-column story is precisely what BusinessSolvency exists to close.
The Annual Solvency Report for Ridgeline Landscaping — produced automatically from the platform — presents the following picture at the FY2027 review, three years into the story. The headline score is unambiguous: 41/100, "High Stress — Action Required." The four indicator tiles underneath it show why: DSCR reads 12.31x, "Well Covered" — green — while Cash Trend, the Sustainable Cashflow Breakeven Gap (−$18,986) and Current Ratio all carry the warning.
BusinessSolvency Solvency Report — Ridgeline Landscaping · FY2025–FY2027 · Score 41/100
Recommended actions — priority order
This is worth sitting with. The platform's debt-coverage ratio says this business is fine at the FY2027 review — lifted by the one-off tax refund. A reader who glanced only at DSCR would walk away from FY2027 reassured. The Breakeven Gap does not make that mistake: it tests each year on its own tax and counts the owner's drawings, so the refund cannot hide the shortfall. The recommended actions are addressed at the one thing every green indicator was silent about: a bank account still in overdraft, with the owner still drawing more than the business earns.
For a sole trader there is no company director, so the Director Penalty Notice regime does not apply — but the owner is personally liable for the whole tax debt, and the ATO's ordinary debt recovery applies. "Engage the ATO proactively" means the same thing either way.
One navigational note for anyone using the live platform: for historical years, this single consolidated report — DSCR, Cash Trend, Breakeven Gap and Current Ratio together — is one click away. For forecast years, the Forecast page shows a live Sustainable Cashflow dashboard inline, updating as figures are typed; the Solvency Forecast report adds DSCR, Current Ratio and an overall score. Read together, they give a forecast year the same complete explanation this historical report gives in one page.
The Ridgeline Landscaping demonstration makes four things visible that most financial tools never show a business owner.
First, that a business can be growing strongly and profitable in every single year — and still be in a genuine cash crisis. Ridgeline's Net Income never once turned negative across all six years, FY2025–FY2030, while its bank account sat in overdraft for four of them. The danger came from Owner Drawings quietly outrunning each year's actual profit, and from tax timing that no profit and loss statement shows.
Second, that the warning signs are present and measurable early, and in different indicators in different years. In FY2026, cash, Current Ratio and DSCR all turned together. In FY2027 and FY2028, DSCR was green again while cash, Current Ratio and the Sustainable Cashflow test all stayed red — the test failing in FY2026, FY2027 and FY2028 alike. The same indicators then confirmed the recovery: Current Ratio from 0.68 to 0.80 to 2.33, cash from −$21,556 to $0. An owner reading several figures together gets both the earlier warning and the earlier confirmation that a correction is working.
Third, that this pattern has nothing to do with company structure, boards, or director duties. Ridgeline is a sole trader. Section 588G and ASIC RG 217 do not apply to it in the strict legal sense — and the danger, and the recovery, are exactly as real anyway. This is why BusinessSolvency is built for every business structure.
Fourth — and this is the part worth sitting with — the recovery came from discipline and planning, not rescue: no debt forgiveness, no shrinking of the business. Revenue grew from $192,000 to $420,851, with prices kept ahead of inflation. What changed was how much the owner drew out relative to what the business earned, the owner's willingness to put money back in to build a genuine reserve once the overdraft was cleared, and — the lesson for every accountant — the tax cash, which can be planned a year ahead. The cash-flow test, not the balance sheet, is the test that matters when it counts; Ridgeline's story shows why it has to be read alongside the others every year, not once at tax time.
The key figures for all six years, straight from the BusinessSolvency calculation engine. Owners can stop here, or read on.
In short: every key figure for FY2025–FY2030 in one table, with the cash movements and the solvency ratios year by year.
| Figure | FY2025 | FY2026 | FY2027 | FY2028 (F) | FY2029 (F) | FY2030 (F) |
|---|---|---|---|---|---|---|
| Revenue | $192,000 | $265,000 | $305,000 | $335,500 | $375,760 | $420,851 |
| Net profit (Net Income) | $81,292 | $17,294 | $30,260 | $48,679 | $64,676 | $81,801 |
| Owner’s tax set aside | $24,708 | $0 | $1,778 | $8,360 | $16,100 | $24,159 |
| Trading cash (operating cash flow) | $111,000 | −$13,283 | $78,057 | $61,094 | $75,883 | $59,596 |
| of which set aside into the cash reserve | $0 | $0 | $0 | $0 | $0 | −$29,892 |
| Spent on equipment and buildings | −$12,000 | −$70,179 | −$3,177 | −$5,000 | −$2,654 | −$2,400 |
| New borrowing | $0 | $28,393 | $0 | $0 | $0 | $0 |
| Loan repayments | $0 | −$5,048 | −$5,083 | −$5,000 | −$4,246 | −$3,840 |
| Owner’s money put in | $0 | $41,786 | $0 | $0 | $0 | $0 |
| Owner’s reserve top-up | $0 | $0 | $0 | $0 | $0 | $15,717 |
| Owner drawings | −$65,000 | −$50,476 | −$52,740 | −$54,900 | −$57,100 | −$59,400 |
| Drawings reserve set aside | $0 | $0 | $0 | $0 | $0 | $0 |
| Cash at start of year | $0 | $34,000 | −$34,807 | −$17,750 | −$21,556 | −$9,673 |
| Cash at year end | $34,000 | −$34,807 | −$17,750 | −$21,556 | −$9,673 | $0 |
| Cash reserve held (a separate asset) | $0 | $0 | $0 | $0 | $0 | $29,892 |
| ATO amounts owing | $24,708 | $0 | $1,778 | $6,582 | $7,740 | $8,059 |
| Long-term debt | $0 | $23,345 | $18,262 | $13,262 | $9,016 | $5,176 |
| Suppliers owed (trade creditors) | $3,699 | $7,435 | $8,558 | $9,181 | $10,048 | $8,389 |
| Sustainable Cashflow target: revenue above (+) or below (−) it | +$19,012 | −$42,162 | −$18,986 | −$16,022 | +$27,178 | +$22,268 |
| Loan cover (DSCR): trading cash ÷ loan repayments | no loan | −2.01 | 12.31 | 10.29 | 15.85 | 14.54 |
| Current Ratio: short-term assets ÷ short-term debts | 1.47 | 0.96 | 0.80 | 0.68 | 0.80 | 2.33 |
- Cash check: each year’s cash at year end equals cash at the start of the year, plus trading cash, less equipment and buildings, plus or minus the financing lines above; and each year starts with the previous year’s closing cash. It agrees to the dollar in all six years.
- Tax: the owner’s personal income tax on the business profit, at the rates legislated for each year (with the Medicare levy and the Low Income Tax Offset), set aside in the business’s figures.
- The cash reserve: money set aside into the reserve is taken out of trading cash and held as a separate asset, so “cash at year end” is the cash left free after the reserve. Both are shown. No reserve is set aside while the bank is overdrawn; in FY2030 the reserve takes only the cash to spare.
- The Sustainable Cashflow target counts every cash payment, including equipment, loan repayments and owner drawings, and counts new borrowing and money put in by the owner as cash in (Chapter 3).
- Scores: the BusinessSolvency score is 41 out of 100 for the actual years and 41 for the forecast.
- See it live: during alpha testing, request access to open this business’s forecast in the BusinessSolvency app.