Ratio and margin analysis, cash flow and receivables reviews, break-even modelling and cost variance — turning the same set of books into decisions you can act on.
Credentials
Bookkeeping tells you what happened; finance tells you what it means. Three ideas separate an owner who reads their numbers from one who is surprised by them — the gap between profit and cash, the ratios that reveal health, and the reporting standard that applies to your size.
A profitable month can still run out of money. Profit is recognised when you invoice; cash arrives when the client pays. The distance between them is where small businesses fail.
Five numbers that turn a stack of transactions into a health check. The targets are rules of thumb for Indonesian SMEs — the direction matters more than the decimal.
| Ratio | Healthy |
|---|---|
| Gross margin | > 40% |
| Net margin | > 10% |
| Current ratio | > 1.5× |
| Collection (DSO) | < 30 days |
| Inventory turnover | > 6×/yr |
Indonesia has a tiered set of standards (SAK). The right tier depends on your size and public accountability — using the wrong one is a credibility risk with banks and the tax office.
The same five Palu businesses from the Accounting page — now read through a finance lens. Each case turns the bookkeeping into ratios, cash-flow and break-even analysis. Follow View the books → on any case to see the underlying books — where two cases are also prepared as formal PSAK statements. The same data, a third professional lens.
Pak Hasan's small café. The books are clean — the finance question isn't ‘how much profit’ but ‘how safe’: margin per menu line, and the minimum turnover before it loses money.
Using the corrected COGS of Rp 12 M (see the Reconciliation Finding on the Accounting page), not the erroneous Rp 14 M in the income statement. The correction lifts reported profit.
| Ratio | Value | Target | Read |
|---|---|---|---|
| Gross margin | 63,6% | > 40% | Strong |
| Net margin | 23,0% | > 10% | Healthy |
| OpEx / revenue | 40,0% | < 45% | Reasonable |
| Payroll / revenue | 24,3% | < 30% | Controlled |
What is the minimum turnover that covers all fixed costs? Fixed cost divided by the contribution-margin ratio.
| Component | Value |
|---|---|
| Monthly fixed cost (opex) | Rp 13,183,333 |
| Contribution margin ratio | 63,6% |
| Break-even revenue | Rp 20,741,861 |
| Actual revenue | Rp 32,930,000 |
| Margin of safety | 37,0% |
A PKP grocery store. Grocery margins are thin, so the finance turns on two things: how fast inventory converts to cash, and how much VAT must be remitted to the tax office.
Inventory is cash parked on the shelves. The faster it turns, the less capital is tied up and the healthier the cash flow.
| Metric | Value | Read |
|---|---|---|
| Beginning inventory | Rp 13,800,000 | |
| Ending inventory | Rp 4,625,000 | |
| COGS (value out) | Rp 27,460,000 | |
| Inventory turnover | 2.98×/mo | Fast |
| Days inventory | ≈ 10 days | Healthy |
| Avg working capital in stock | Rp 9,212,500 |
As a PKP, Toko Makmur collects Output VAT on sales and pays Input VAT on purchases. The difference is remitted to the tax office — a real cash outflow that must be planned for.
| Component | Value |
|---|---|
| Output VAT (collected on sales) | Rp 3,020,600 |
| Input VAT (paid on purchases) | Rp 2,011,350 |
| VAT payable (remit to tax office) | Rp 1,009,250 |
A software shop billing corporate clients. On paper it's very profitable — but Rp 72.1 M is still uncollected. A textbook ‘profit isn’t cash’ case — collection risk, not profitability, is the real question.
The AR ageing shows how long money is stuck with clients. DSO (Days Sales Outstanding) measures the average days until an invoice turns into cash.
| Status | Invoices | Value (DPP) | Read |
|---|---|---|---|
| Paid | 5 | Rp 89,000,000 | Collected |
| Partial | 2 | Rp 51,000,000 | Rp 32.1 M left |
| Unpaid | 3 | Rp 40,000,000 | Due Feb |
| TOTAL | 10 | Rp 180,000,000 |
A building contractor on a Rp 2.8 B, 3-month contract. The finance is project control: are costs on budget, and what the true project margin is as the work progresses.
Budget vs actual gives an early warning on cost overruns. A positive variance is under budget; negative is overspend to chase down before the next progress claim.
| Item | Budget Jan | Actual Jan | Variance |
|---|---|---|---|
| Materials | 555.000.000 | 540.000.000 | 15.000.000 |
| Labour | 115.000.000 | 114.500.000 | 500.000 |
| Equipment (plant hire) | 43.000.000 | 41.000.000 | 2.000.000 |
| Overhead & safety | 50.000.000 | 29.300.000 | 20.700.000 |
| TOTAL | 763.000.000 | 724.800.000 | 38.200.000 |
Pak Haris's 20-room boarding house. A small-property case: what matters isn't sales but occupancy, yield per room type, and net operating income (NOI) after the final rental tax.
Occupancy measures how many rooms are filled; yield measures actual revenue against full potential. An empty room is permanently lost revenue — it can't be ‘sold’ next month.
| Room type | Units | Filled | Potential | Actual | Yield |
|---|---|---|---|---|---|
| AC Deluxe | 5 | 5 | 6.000.000 | 6.000.000 | 100% |
| AC Standard | 5 | 4 | 4.500.000 | 3.600.000 | 80% |
| Non-AC | 10 | 8 | 6.500.000 | 5.200.000 | 80% |
| TOTAL | 20 | 17 | 17.000.000 | 14.800.000 | 87% |
NOI is the profit from running the boarding house after all costs and the final rental tax. Break-even occupancy shows the minimum rooms that must be filled to avoid a loss.
| Description | Amount (Rp) |
|---|---|
| Rent received | 15.450.000 |
| Operating cost | (11.109.000) |
| PROFIT BEFORE TAX | 4.341.000 |
| Final PPh 4(2) — 10% of gross | (1.545.000) |
| NET PROFIT (NOI) | 2.796.000 |
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