Extended Equation as an Operating Dashboard

Assets + Expenses = Equity + Revenue + Liabilities – a model linking what we own and spend to how we fund and earn. This is not just a formula; this reflects the business reality we choose to record.

For us, the trucks, trailers, earthmoving gear, and workshop gear represent Assets, while diesel, tyres, wages, and maintenance are Expenses. Together, these factors contribute to our equity and profitability. The extended equation reflects that everything, from diesel use to contract income and loan repayments, must balance to show a real picture of the value created or lost each month.

Chapter one highlighted that accounting is not a ‘camera’ but a model of our reality. Realising that our monthly MYOB reports are not just admin tasks, but a dashboard revealing where equity is growing or slipping. With this information, I am able to critically assess the impact of which expenses most significantly shift our equity from month to month —and why? Tracking these assists in managing cash flow, allowing us to feel more in control and safeguarding against dry seasons or breakdowns.