What does fixed cost absorption measure?
It indicates what part of your structure is covered by the current level of activity. It helps you see whether growing improves the margin or simply covers costs
What does the billable occupancy rate indicate?
It compares paid hours with hours actually sold. If you have a lot of activity but low billable occupancy, the problem is not always
What does the margin per billable hour tell you about your real profitability?
It measures how much you earn for each hour you actually sell to the client. It is very useful in offices, workshops, installation companies, consulting…
What is the technical minimum price of a one-off sale?
It is the price below which that operation starts to destroy value. It helps decide whether to accept a special order
What is the difference between margin and markup, and why are many prices miscalculated?
Margin is calculated on the selling price and markup on the cost. Confusing them leads many companies to believe they are earning more than they actually are.
When is it advisable to request a grace period on a loan and what risk does it carry?
It is advisable when the investment takes time to generate cash flow, for example, machinery or commercial expansion. The risk is that the future instalment rises…
How to estimate the ‘cash gap’ of a grant that is collected after the fact?
Calculate the total investment, subtract what you can finance with a supplier or bank, and assume that you advance the subsidised part yourself until collection
What is a 13-week treasury model and why is it so widely used in SMEs?
It is a rolling weekly control of collections and payments that allows you to anticipate cash flow pressures with 6 to 10 weeks of lead time
How to calculate the minimum operating cash you absolutely need?
Start from your unavoidable monthly payments, payroll, Social Security, rent, utilities, debt instalments and estimated taxes.
What is the difference between a grant, a subsidised loan and a subsidised guarantee, and why does it affect your cash flow?
A grant reduces costs, but is usually paid after justification, so it requires prior cash. A subsidised loan gives you immediate liquidity
