In terms of business analysis:
Yin and Yang are contrasting forces. They are also aspects of different phases.
Yin and Yang can also be expressed as +/-, I/O.
Yang represents even numbers, the front, movement (GO), nominal functions, abstraction, output, extroversion, increase, rise, expansion, growth, explicitness, strength, activity, advancement, offense, future, and public.
Yin represents odd numbers, the back, stillness (STOP), substantial functions, substance, input, introversion, decrease, decline, contraction, decay, implication, weakness, passivity, retreat, defense, past, and private.
Applying Yin and Yang to actual business:
Outflow, disbursement, and shipment are Yang. Inflow, receipt, and storage are Yin.
Substance is Yin, nominal is Yang. Goods are Yin, “money” is Yang.
Consumption is Yin, production is Yang. Demand is Yin, supply is Yang.
The foundation of management is profit and loss, with balance sheets working in the background. Profit and loss are represented by the first line as sales, the second line as expenses, and the third line as profit. Balance sheets are represented by the first line as assets, the second line as liabilities, and the third line as capital.
Profit and loss appear as sales and profit. Expenses work in the background. Sales and profit appear as profit and loss. Loss is Yin, profit is Yang. There are four phenomena: increased revenue and profit, increased revenue and decreased profit, decreased revenue and increased profit, and decreased revenue and profit.
First, look at Yin and Yang, that is, whether revenue is increasing or decreasing. If revenue is decreasing, clarify the reasons and causes for the decrease. Next, look at whether profit is increasing or decreasing. If profit is decreasing, clarify the reasons and causes for the decrease in revenue while comparing it to sales. In this case, expenses are working in the background.
Increased revenue and profit, that is, the sun is represented by Qian and Li. Lesser Yin is represented by Dui and Zhen. Lesser Yang is represented by Xun and Gen. Greater Yin is represented by Kan and Kun.
Profit and loss work on the surface, so they are Yang. Balance sheets work in the background, so they are Yin. Selling money is income and Yin, goods are shipment and Yang. Buying money is expenditure and Yang, goods are storage and Yin. Debits are fund procurement and Yin. Credits are fund utilization and Yang.
Increased revenue and profit, that is, the sun is represented by Qian and Li. Increased revenue and decreased profit, that is, Lesser Yin is represented by Dui and Zhen. Decreased revenue and increased profit, that is, Lesser Yang is represented by Xun and Gen. Decreased revenue and profit, that is, Greater Yin is represented by Kan and Kun.
Qian represents the sky. The hexagram of Qian is entirely Yang. +++, III. Everything is smooth, constantly and powerfully moving. It appears healthy, but conversely, there is no interaction between Yin and Yang. It is positioned at the beginning of everything, but without the interaction of Yin and Yang, it is prone to loneliness and self-righteousness.
It is the hexagram of increased revenue and profit. Both sales and profit are increasing. Although expenses are also increasing, there seems to be no fault. Therefore, there is no way to advise, and people tend not to listen to others’ opinions. It is easy to become isolated. However, if you do not pay attention to the increase in expenses, there is a risk of turning into Dui.
Good things often come with troubles.
Dui represents a marsh. The hexagram of Dui is Yang in the first and second lines, and Yin in the third line. +±. The third line of Kan, representing water, turns to Yin and blocks the interaction. The virtue of the hexagram is joy.
It is the hexagram of increased revenue and decreased profit. Although sales are increasing, profit is not rising as expected. For now, it is pleasing that sales are increasing. It is necessary to clarify the reasons for the increase in expenses. The issue is whether the increase in expenses is a sign of growth or decline.
Li represents fire. The hexagram of Li is Yang in the first line, Yin in the second line, and Yang in the third line. ±+. The hexagram of Li is ±+. Two Yangs are sandwiched by Yin, representing the image of fire.
Li has contradictory characteristics of “attaching” and “separating.” Pay attention to the movement of expenses working in the background. There is a risk of stalling if it overheats.
Li represents takeoff. There are many accidents during takeoff.
It is the hexagram of increased revenue and profit, with expenses also decreasing. It seems to be the most ideal phenomenon. It is the most energetic type, but it is necessary to clarify why expenses are decreasing. If you only look at short-term growth, there is a risk of lacking long-term perspective.
Zhen represents thunder. The hexagram of Zhen is Yin in the first and second lines, and Yang in the third line. –+. The hexagram of Zhen is –+. Awakening, breaking through two Yins, and Yang awakens.
It is the time to rise and be inspired.
It is the hexagram of increased revenue and decreased profit. Although sales are increasing and expenses are decreasing, profit is not as expected. Investigate the balance sheets working in the background. There may be serious structural problems.
Although profit is decreasing, expenses are decreasing, and sales are starting to increase. It is also a sign of regeneration. It is time to rise and be inspired.
Xun represents wind. The hexagram of Xun is Yang in the first and second lines, and Yin in the third line. +±. The hexagram of Xun is +±. Xun is wind. Yin sneaks into Yang. The virtue of the hexagram is to hide.
It is the hexagram of decreased revenue and increased profit. Although revenue is decreasing, expenses are also decreasing, and profit is increasing. It is necessary to look at the balance sheets working in the background. Are past assets being consumed, or is there investment for regeneration? It is necessary to look at the future with changing lines.
Although both profit and expenses are increasing, sales are not increasing as expected. If you do not approach it more aggressively, misfortune will sneak in. Have confidence.
Kan represents water. The hexagram of Kan is Yin in the first line, Yang in the second line, and Yin in the third line. -±. The hexagram of Kan is -±. Kan is a hole formed by missing earth. Kan is flowing water. The virtue of the hexagram is to fall. Yang sandwiched by Yin is sincerity.
Kan stops bad flows. Still water.
It is the hexagram of decreased revenue and profit. It is also the reverse hexagram of Li, which is considered the most ideal. Its nature is water, opposite to the fire of Li. Although revenue and profit are decreasing, expenses are increasing. It is necessary to review the balance sheets working in the background.
Gen represents a mountain. The hexagram of Gen is Yang in the first line, Yin in the second line, and Yang in the third line. ±-. The hexagram of Gen is ±-. Yang rising from below reaches the peak.
It is the hexagram of decreased revenue and increased profit. Although sales are decreasing, expenses are decreasing, and profit is increasing. It may be a sign of regeneration. It is necessary to look at the balance sheets working in the background.
End and begin anew.
Kun represents the earth. The hexagram of Kun is Yin in the first, second, and third lines. —. The hexagram of Kun is —.
It is the hexagram of decreased revenue and profit. Everything is Yin. It is necessary to strive for regeneration according to reality.
Follow the heavens. Good or bad fortune depends on the balance sheets working in the background.
Behind the profit and loss (Yang), the balance sheet (Yin) operates. From profit and loss, capital increase (Yang) and capital decrease (Yin) arise. From capital and total assets, the four phenomena of total asset increase and capital increase (Taiyang), total asset increase and capital decrease (Shaoyin), total asset decrease and capital increase (Shaoyang), and total asset decrease and capital decrease (Taiyin) arise. Behind the four phenomena, liabilities operate.
The balance sheet consists of the initial line as total assets, the second line as total liabilities, and the top line as capital. Capital increase and total asset increase, that is, Taiyang, correspond to Qian and Li. Capital increase and total asset decrease, that is, Shaoyin, correspond to Dui and Zhen. Capital decrease and total asset increase, that is, Shaoyang, correspond to Xun and Gen. Capital decrease and total asset decrease, that is, Taiyin, correspond to Kan and Kun.
First, why and what caused the capital increase or decrease? We explore the causes and reasons for the capital increase or decrease.
Qian and Li represent the difference in liabilities for capital increase and total asset increase. Dui and Zhen represent the difference in liabilities for capital increase and total asset decrease. Xun and Gen represent the difference in liabilities for capital decrease and total asset increase. Kan and Kun represent the difference in liabilities for capital decrease and total asset decrease.
In short, the operation of liabilities holds the key. In profit and loss, it is expenses that correspond to liabilities.
Profit and capital are heaven. Expenses and liabilities are human. Income and assets are earth.
Profit corresponds to capital. Expenses correspond to liabilities. Income corresponds to assets.
The center is expenses and liabilities.
In management data, there are three elements: Heaven, Earth, and Man.
Heaven represents financial data, which includes natural numbers, discrete numbers, surplus, infinity, and numbers. Earth represents physical data, which includes real numbers, continuous quantities, finite quantities, and amounts. Man represents human data, which includes natural numbers, discrete numbers, surplus, and finite quantities.
Objects are Yang. People are also Yang. Money is Yin.
The economy is a system that moves with the flow of “money.” From the flow of “money,” income and expenditure arise. Income (Yin) and expenditure (Yang).
From income and expenditure, sales and purchases, lending and borrowing arise. Sales: money is Yin, objects are Yang. Purchases: money is Yang, objects are Yin. From lending and borrowing, claims and debts arise. Lending is expenditure and Yang. Borrowing is income and Yin.
From sales and purchases, profit and loss arise. From lending and borrowing, balance sheets arise.
Also, from expenditure or debit (Yang), and from income, credit (Yin) arises. Debit, assets, and expenses are Yang. Liabilities, capital, and sales are Yin.
Fundraising is income, hence Yin. Fundraising includes liabilities, capital increase, and income. Therefore, liabilities, capital increase, and income are Yin.
The small hexagram of profit and loss is the first line of sales, the second line of expenses, and the third line of profit. The small hexagram of the balance sheet is the first line of assets, the second line of liabilities, and the third line of capital. Profit and loss are the inner hexagram, and the balance sheet is the outer hexagram.
Sales correspond to assets. Expenses correspond to liabilities. Profit corresponds to capital.
The key lies in the increase and decrease of expenses and liabilities. What influences the increase and decrease of expenses and liabilities?
Sales are compared to expenses. Expenses are compared to sales and profit. Assets are compared to profit and liabilities. Liabilities are compared to assets and capital. Capital is compared to liabilities.
The mutual hexagram is the first line of expenses, the second line of profit, the third line of assets, the fourth line of profit, the fifth line of assets, and the top line of liabilities. Expenses correspond to profit. Profit corresponds to assets. Assets correspond to liabilities.
The profitability ratio of variable costs and fixed costs differs depending on the industrial structure. Profitability is constrained by market size, growth, and conditions.
Current assets and current liabilities form working capital. Working capital is a variable factor in cash flow. Liquidity is variability.
Assets, liabilities, and expenses all have variability and invariability. Their relationships are simple.
The representative indicator of the overall state of management is the return on total assets. Since the values of total assets and total capital are equal, total assets and total capital can be considered equivalent. The return on total assets is the product of the profit margin and the total asset turnover rate, multiplied by 100.
In short, it is the value obtained by multiplying the turnover rate and the ratio.
The turnover rate is the phase when sales (Yin) correspond to assets (Yang).
The profit margin is an indicator of profit and loss (Yang) and profitability. The total capital turnover rate is an indicator of the balance sheet (Yin) and productivity.
Assets (Yang) and liabilities (Yin), and capital (Yin) are connected through investment. Claims (Yang) and debts (Yin) are in the opposite direction, equivalent, and symmetrical. Assets arise from claims, and liabilities arise from debts.
Assets and liabilities are compared.
New borrowing is secured by latent assets and future earnings. Assets are compared to liabilities and profit. Liabilities are compared to assets and capital.
Most assets are production equipment and are directly linked to sales. Sales arise from expenses. Profit arises from sales.
There are five stages and five types of profit. Gross profit, operating profit, ordinary profit, special profit, and net profit. The type of profit adopted depends on the purpose of the analysis. The nature of the indicator changes depending on the profit adopted.
Profit corresponds to capital.
Fixed liabilities and assets, and depreciation expenses arise from initial investment.
Depreciation expenses are costs.
The conditions for depreciation expenses and debt repayment are determined by the initial investment. Depreciation expenses and monthly debt repayment amounts differ.
Depreciation corresponds to profit and loss, and profit. The amount of debt repayment is reflected in the balance of payments and the balance of liabilities.
Land is not depreciated, and it is produced when a sale is established. Land generates latent profit and loss due to land prices and affects cash flow (balance of payments).
Fixed costs consist of general administrative expenses (excluding personnel expenses) and personnel expenses. General administrative expenses are linked to cost assets.
The break-even point shifts depending on the composition of fixed and variable costs. The ratio of fixed and variable costs differs by industry.
In the I Ching, there are three meanings: invariability, variability, and simplicity.
Truly ever-changing.
Data has Heaven, Earth, and Man.
Sales are constrained by market size and conditions. What in the market affects sales?
Sales have data of Heaven, Earth, and Man. That is, Heaven is sales. Unit price. Man is the number of customers, number of cases. Market size (population). Number of salespeople, etc. Earth is the sales volume, production volume, consumption volume, sales share, etc.
For example, the sales of a gas company are calculated as the number of customers × unit consumption × unit price = sales. In other words, sales are calculated by multiplying people, objects, and money. In other words, people, objects, and money are explanatory variables, and sales are the dependent variable.
Also, people, objects, and money each move independently.
Simply looking at sales alone does not reveal the reality of management. Prices are influenced by unit price movements, and also by supply and demand, which are constrained by population.
It is the movement of Heaven, Earth, and Man.
A small hexagram can be formed with the first line of sales volume, the second line of the number of customers, and the third line of sales.
The combinations are limitless. The important thing is which part influences and moves which part.
Every part has some function.