Three cases, three mechanisms

Each case shows a mechanism the accounts do not display. None transfers to the other two: that is the point.

Of the 3 cases, 1 goes through the engine — the same accounts, the same cascade, the same formula as a client's report. The other 2 carry declared figures, consistent with one another and checked by the code, but not computed by the engine. The difference is written, not masked.

The engineering practice, and its safety margin

Almost all of the cost does not move. The gap to break-even is narrow.

What the accounts show

Income of 2 800 000 francs. The costs that do not fall when activity falls weigh 2 273 000 francs, that is most of the total. The income statement is profitable, and nothing in it signals that the structure is tight.

What the reading adds

The contribution margin on what follows activity is 90,7 per cent, which sets break-even at 2 505 669 francs. The gap to revenue is 10,5 per cent. These figures come out of the engine, on the same accounts and the same cascade as a client's report: a computation can be contested, an assertion could not.

No real company is described, and no figure comes from a client engagement.

The garage, and its seasonality

The annual break-even is reached. The fourth month is not.

What the accounts show

Revenue of 1 240 000 francs, an annual break-even at 1 169 492 francs. The year covers its costs, the balance sheet shows no strain, and the result is positive. The annual accounts carry only a total: they add up the year without saying how it is distributed, and nothing in their form calls for that detail.

What the reading adds

Brought down to the month, the threshold is 97 458 francs, and 4 months fall below it. The accumulated gaps dig the cash position down to 88 512 francs in month 4, against an agreed overdraft of 45 000 francs: 43 512 francs beyond. Both figures are true, the annual and the monthly, and only one is visible in the accounts. The overdraft is not a balance sheet line at closing: it deepens and closes between two dates, and the year settles as though nothing had happened. What the reading adds is not one more figure, it is the rhythm.

No real company is described, and no figure comes from a client engagement.

The agency, and its customer dependency

The least profitable client is the one whose departure costs the most.

What the accounts show

Revenue of 960 000 francs, a result of 5 344 francs. One client accounts for 54,0 per cent, and the accounts do not say who brings in what. They record income and costs by nature, never by client: the question of who weighs what has no line in which to be asked.

What the reading adds

The margin on that client is 9,0 points below the others' — which would suggest it matters little. But the costs that do not move, 236 000 francs, do not move: without it, at unchanged structure, the result goes from 5 344 to -103 520 francs. Concentration decides, not margin. Scaling that client back because it earns less in percentage terms means removing the share that carries the costs which do not move — and the decision is then made on the wrong figure.

No real company is described, and no figure comes from a client engagement.

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