The Finance series
Following one small business,
from its first P&L to its first M&A.
This series chases the things in business numbers that are easiest to get wrong: why profit and cash don’t match, where the cash gets stuck, when a second shop has really paid back, and which company deserves a closer look.
The scenario experiments use the same milk tea shop and the same model: in the first episode it has one cup-sealing machine; by the fourth it has 6 shops and ¥12 million a year in revenue. The Practice then puts the same ideas into a real company’s public filings.
It’s easiest to follow in order, but every episode can be opened on its own. Progress is kept only in this device’s browser.
Bookkeeping From the cash box to debit and credit Playable · in Chinese
It doesn’t start with accounting terms. You first keep the books for a newly opened little milk tea shop: each chapter’s question is the place where the previous chapter’s notation gave way. Take the five chapters in order, and in the end use debit and credit on a shop you haven’t seen before.
- AWhy isn’t the cash box enough?The cash box isn’t wrong, but it leaves things out, and it mixes in money that will have to go back to someone else.You getWhat we have · what we owe · what’s left that is mine
- BHow many places does one event change?As the shop keeps opening day after day, the slips have to follow: one event often changes two places.You getFirst ask what actually changed, then change the slips
- CIf one place is missed, will the slips notice?A helper misses one change and the slips don’t raise an alarm by themselves; give them a second route, and they can check themselves.You getOnly when the two routes agree is everything recorded
- DWhat are debit and credit, really?Once the plus-and-minus signs start a fight, only one convention and one requirement remain, and every other cell can be worked out from them.You getDebit and credit are two columns in the record, not adding and subtracting, not good and bad
- ESwitching to a different shopA shop you haven’t seen, one month of events: from the events one by one, all the way to seeing that it was in fact losing money.You getFrom changes in reality to the record, and on to how the shop looks
Season 1 · Scenario experiments Playable
Each episode starts from one specific moment in running a shop. You make a judgment and see the result first, then come the terms and the limits.
- 01Cash, profit and a cup-sealing machineThe money is already paid, yet profit never dropped by that much at once.Key ideasThe same money shows up at different times in the cash box and in the books · Buying equipment is an asset, not that month’s expense · EBITDA isn’t cash
- 02Profit first, cash laterThe goods are sold, but the money hasn’t arrived.Key ideasProfit is a matter of the books; cash is a matter of time · Receivables, inventory and payables trap cash in between · Payment terms aren’t free money
- 03The second shopThis shop will make money, but can the cash last until the day it does?Key ideasThe books turning positive and the cash paying back are not the same day · Expand faster, and the buffer gets thinner · Money already spent shouldn’t hold today’s decision hostage · Fastest payback ≠ greatest value
- 04The first M&A screeningWhich company is worth looking at more deeply?Key ideasSay why you’re buying before you look at who · The best company ≠ the best acquisition target · The research budget is never enough, so choose your evidence · Numbers are an entry point, not a conclusion
Practice · Exercises on real material Playable · Prototype · in Chinese
Not a fifth episode. The scenario experiments explain the ideas with a made-up shop; a Practice switches to a real company’s public material and has you finish a piece of work the way an analyst would. It’s best to have seen the episodes it uses first.
PlannedNot online yet: only words here, no way in.
- Finance 05 · ValuationThe question the fourth episode leaves at the end: how much is this company actually worth?
- Practice 02 · Capex follow-upThe next worksheet foretold in the Practice 01 review: investment → cash → assets → depreciation.