All dollar amounts are AUD and invented. Each case states its assumptions. Do not use them as a real business forecast, investment comparison or tax example.
A · Mina's Bike Repairs · sole-trader position
At a single date, the business controls cash $9,000, repair tools $5,000 and customer amounts owed to it (accounts receivable) $1,000. It owes a bank $4,000 and suppliers $1,000 (accounts payable). No other balances exist in this simple case. Assets = $15,000; liabilities = $5,000; owner's equity = $10,000. Mina's privately owned bicycle, kept outside the business, is not in these accounts. A shareholder does not exist in this sole-trader case.
B · Mara's Home Tutoring · one simplified service period
Opening business cash and equity are each $2,000, with no other opening balances. During the period, tutoring services worth $1,200 are provided: customers pay $700 now and owe $500. Business operating costs are $600: $450 paid and $150 electricity owed. Assume no GST, tax, depreciation, owner drawings, new capital, other income/expenses or investing/financing cash flows. Statement of Profit or Loss: revenue $1,200 − expenses $600 = net profit $600. Statement of Cash Flows, operating section: received $700 − paid $450 = net cash from operations $250. Closing cash $2,250; closing receivables $500; electricity payable $150; equity $2,600. Check: $2,750 assets = $150 liabilities + $2,600 equity. Profit is not cash because some services remain unpaid and one expense is unpaid.
C · Kestrel Community Print · trading activity
The business sells printed goods for $2,400 in a period. Inventory used in those goods cost $1,100 (Cost of Goods Sold); other operating expenses total $550. Under this simplified example, net profit = $2,400 − $1,100 − $550 = $750. Cash collected from customers is $1,900; cash paid to suppliers is $1,300 and other operating cash payments are $500, giving net cash from operations $100. These two summaries do not supply opening/closing inventory, receivables, payables or cash; do not invent a closing Statement of Financial Position. No GST, tax, depreciation or other flows are modelled.
D · Who owns it? Four fictional plans
Dee begins a one-person service business as sole trader. Dee and Ari consider a general partnership and a written agreement; in this scenario they do not form a separate company and general partners have unlimited liability for its obligations. Other legally defined partnership forms differ. The Orchard Studio Pty Ltd is a fictional proprietary company with shareholders and directors. North Quay Supplies Ltd is a fictional public company; it is unlisted in this scenario. A public company can be unlisted; a company is a separate legal entity. Liability protection for shareholders is not an absolute protection for directors or every circumstance. See ASIC company types, business.gov.au's partnership types and ownership comparison before making any real-world claim.
E · Two deliberately small position panels
Both panels are fictional, at one date and in AUD. River Post, a sole-trader trading business: cash $7,000, receivables $2,000, inventory $3,000, equipment $8,000; accounts payable $3,000, loan $5,000, owner's equity $12,000. Metro Supply Ltd, a fictional unlisted public company: cash $10,000, receivables $5,000, inventory $7,000, equipment $18,000; accounts payable $6,000, loan $14,000, shareholders' equity $20,000. Both classify resources and obligations; the equity label reflects ownership. Neither panel alone proves profit, cash generation, value, solvency or a good investment. Calculated totals: River $20,000 = $8,000 + $12,000; Metro $40,000 = $20,000 + $20,000.
F · The decision desk
Kai can compare a deposit with buying shares using public information; risk, access to cash, timeframe and ownership differ. Sam instead considers running a small bicycle-service business, taking on operating work and obligations. This is an analytical contrast, not a ranking or recommendation. A shareholder owns an interest in a company; a sole trader owns and runs their business directly. An accountant can prepare/interpret records and advise within their role; an auditor provides an independent opinion on a financial report where an audit is required. Neither role guarantees profit. Check current MoneySmart investment descriptions and ASIC's account of financial reports.