RE:What the income statement tells usGerritEtmans wrote: Somewhat remarkably, they only lost $2.4 Million on sales of $1.1 Million. I would have expected a higher burn rate. How did they achieve this? In essence, the term "Kurzarbeit" (= short work week) is a misleading euphemism: while the direct manufacturing costs one year ago (Q2/2016) amounted to over $3.6 million, they are now merely $513,000. That's 1/7 of what it was one year ago. Translation: that's a mass lay-off, not "Kurzarbeit". It will be very difficult to come back from this scenario. It is also fairly devastating, when you want to show your operation to prospective customers, and the place is totally dead.
At the same time, G&A expenses went up, probably due to higher sales activities. Also interesting: they drag out paying their bills: The trade payables are now $12.4 million; they were $8 million in Q2/2016. Then, the current liabilities were $10.3 million; now they are $27.5 million. Most critically, though: they have now pretty much maxed out on available credit.
Enough for me to stay short... even if there is sufficient cash to survive another quarter...
Manufacturing costs also include cost of raw materials. If you are not producing anything, then there are no raw materials to buy.