Most small businesses in India fail with a full order book. They die of arithmetic — cash locked in receivables, prices set by copying a competitor, growth funded at rates the margins cannot carry. Five numbers, none requiring an accountant to compute, catch nearly all of it early.
Break-even: the floor under everything
Break-even units = fixed costs ÷ contribution per unit (price minus variable cost). Below that volume every sale deepens the loss; above it, contribution flows to profit. The gap between actual sales and break-even — the margin of safety — is the honest measure of how much bad news the business can absorb. The break-even calculator computes both, plus the operating leverage that says how violently profit responds to a change in sales.
Margin versus markup: the pricing trap
Markup is on cost; margin is on price — and confusing them quietly underprices everything. A 25% markup is a 20% margin; the difference compounds across a catalogue. Price from target margin, not habitual markup, and know all three layers — gross, operating and net — because each answers a different question about where money leaks. The profit margin calculator keeps the definitions straight. (The margin calculator is the trading margin — an unrelated number that shares a name.)
The cash conversion cycle
Profit is an opinion; cash is a fact. The working capital cycle — days your money sits in inventory, plus days customers take to pay, minus days suppliers give you — measures how long each rupee is trapped between spending and collection. A growing, profitable business with a long cycle can literally expand itself into insolvency, because every new order locks up more cash. The working capital calculator computes the cycle and the funding it demands; the burn rate calculator answers the runway question for anyone spending ahead of revenue.
What the lender will check
Before extending a loan, a banker computes your DSCR — cash operating income divided by the year's debt service. Below about 1.2× most lenders hesitate, because a ratio near 1 means one soft quarter misses a payment. Compute it on yourself with the DSCR calculator before the application: it tells you the loan size your cash flows actually support, which is the negotiation's real starting point.
GST in the operating math
Since the September 2025 rationalisation, GST runs three slabs — 5%, 18% and 40% for luxury and sin goods. Two operating rules matter more than the rates. Registered businesses pay GST only on value added — input tax credit refunds the tax on purchases, making the compliance chain (and buying from registered suppliers) worth real money; the GST calculator and ITC calculator show the flow. And quote prices GST-inclusive or exclusive deliberately — an 18% surprise at invoice time has ended plenty of client relationships.
⚠️ GST slabs, registration thresholds and lender covenants change; the September 2025 structure is current at review. Verify before relying on it — and none of this substitutes for an accountant who can see your actual books.
Key takeaway
Five numbers run a small business: break-even (with the margin of safety above it), margin computed on price rather than cost, the cash conversion cycle that decides how much growth you can fund, the DSCR a lender will compute anyway, and GST handled as an input-credit chain rather than a cost. None needs software — all five need honesty, quarterly.
More in Module 11 — Money beyond funds: salary, tax, loans and property
Decoding your CTC: why in-hand is so much less
Cost to company is what employing you costs, not what you are paid. The four layers inside a CTC, where EPF and gratuity actually go, and the basic-salary split that silently sets three benefits at once.
Old vs new tax regime: the choice that decides everything else
The new regime is the default and usually the winner — but not always. Where the break-even sits, why the §87A rebate never touches capital gains, and why the regime decides whether ELSS, HRA and 80D planning are worth anything at all.
Advance tax and TDS: how India collects before you file
TDS is a running prepayment, not the final bill, and advance tax fills the gap in four dated instalments. The 15/45/75/100 calendar, the cliff in the early triggers, and the presumptive shortcut that collapses it to one March payment.
ESOPs, RSUs and ESPPs: taxed twice, at two different prices
Slab tax on the discount when shares become yours, capital gains from that day's FMV when you sell. Why tax can fall due on paper value, and why the cost-basis error is the most common mistake in self-filed returns with equity comp.
Freelancing full-time: the 50% deal most professionals miss
Presumptive taxation lets a qualifying professional declare half of gross receipts as profit — no books, no audit, one advance-tax instalment. How the scheme works, and how to compare a salary and a freelance offer honestly.
How an EMI actually works (and the flat-rate trick)
Interest on the outstanding balance first, principal with the remainder — so early years barely repay anything. Why tenure sets total interest, why early prepayment punches above its weight, and why a flat rate is roughly double what it claims.
A surplus and a loan: prepay, refinance or invest?
Prepayment is a guaranteed, tax-free return equal to your loan rate — cut the tenure, not the EMI. When a balance transfer clears its fees, and when investing the surplus honestly beats both.
Rent vs buy: the honest math
Terminal net worth on two fully-specified paths, with the renter investing every rupee the buyer sinks. The two assumptions that decide the answer, and the tax change that flipped older calculators' verdicts.
The small savings family: PPF, SSY, NSC, KVP, SCSS and kin
One sovereign family, priced quarterly. Which schemes compound, which pay income, which are tax-exempt — and why the after-tax yield, not the poster rate, is the number to compare.
Insurance is not an investment: term plans and the LIC question
Bundled policies do both jobs badly. Sizing a term cover from needs rather than folklore, and evaluating an endowment you already own on forward numbers alone — surrender, paid-up or continue.
What trading actually costs: beyond zero brokerage
STT, exchange charges, GST, stamp duty and DP fees stack on every trade no broker can waive. The break-even move to know before a trade, the averaging-down trap, and what leverage really multiplies.