RE:Verde Q3Hello Cottonwool,
Thank you for the great post.
You are bang on regarding the Trade Receivables at quarter end. At $3,415,000 this is a significant increase over the same time last year, especially as it is all denominated in local currency. Looking at receivables on a Brazilian Real measurement here are the numbers:
September 30, 2019 R$5,141,000
September 30, 2020 R$14,394,000
Increase YOY R$9,253,000
Increase % 180%
I would have expected an increase of this magnitude to receive some kind of reference or explanation in the MD&A - but nothing was mentioned other than "due to business growth".
Sales in Q3 were R$14,815,411, so essentially the entire 3 months sales revenues remained uncollected at quarter end. This could be a signal that customers were encouraged to take delivery of product in advance of requirements with the assurance that they would not have to pay for many months. Or it may be that management just took their eyes off the road and all this outstanding receivables have now been collected.
Given it will be over 55 days since quarter end when management conducts the conference call on the 24th, it would be very helpful to get an update on collections during this period.
Perhaps you can raise this question if you are participating in the conference call?