morning all,
all this talk about cash flow positive and the like - I find very confusing.
IMO - yes, it CAN be significant if a company becomes CF+ or CF neutral or similar - but, one of course has to know the context for it to be of any significance whatsoever - pretty much like any number.
I really wish we didn't see CF+ time predictions from the company - I just think that so many things can change the picture -
lets take right now for example.
Lets say we stop the presses and look right now at what we have on the books ----------- ok, fine - we might be able to say - righto -------- we will be CF+ in 6 weeks by the looks of it.
Great - wonderful.
Now - not so much what we call contracts - even 10 million contracts per year etc. -- but, lets say that - hmmm,
a large one off contract - say the UN - drops an order for a bazillion emergency tents on our doorstep in 4 weeks.
Now - that would be a large order -------- I would say far and away the largest single order we have had and might have for a long time (military might drop some big ones initially as well) -
so ------------- how would our CF+ for 6 weeks look then???????
I would think - rather sad.
Sure, we might actually make the CF+ in the 6 weeks - but, we could easily be NOT CF+ in say 11 weeks because we had a large bill for inventory due to pay in between that lot for the chemicals to fund the initial run for the UN order.
Would it be bad news --------------- no, it would be very good news -- but, the old CF+ idea could be out the window until the receipts for the UN deal came into the letterbox.
As time marches on of course - it's not such a balancing act - like when we have say $200 million revenue and we get an order for say $20 million of product in one hit -
but, it sure can be an issue when we only have say $3 or $4 million a month revenue - and we get a large order.
I can only really see something like UN or Military doing that (meaning a very large order in one go) - because most clients - big or small keep ordering on a regular basis - not a big lot in one go.
Profit or loss can be effected similarly - but, it's only a twice a year measured thing at present (until we are on Nasdaq) - and, the profit or loss is easily explained by figures you actually see if there is a large order filled but, not invoiced.
Cash is a different matter. Anyway - that's my thoughts as I listen to Parsifal talking about sales and when they could be dropping at what rate etc. etc. and reading predictions about CF+ or neutral or the like.
all IMO -- have a great day all
Pinto
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