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A rule almost a hundred years old says a business gets cheaper the more times it has done the work — not the more it makes this year. The difference decides whether a richer rival can catch up. It is also the most over-claimed advantage in business, so half of today's letter is about checking it.

Most suppliers have to win the sale all over again every time. A few are written into the customer's own paperwork, and after that the customer has to do the work of removing them. That difference is one of the quietest advantages in business, and it leaves a paper trail you can actually look for.

Crores can move through a company's bank account in a year without a rupee of it belonging to the company. There is an accounting rule that decides which is which, and knowing it will stop you mistaking a big number for a big business.

Some companies are paid by their customers whether or not those customers take delivery. It is the closest thing in business to a salary. But a promise is only worth as much as the person who made it, and there are four questions that tell you whether this one is worth anything at all.