GoBlue2016 wrote:
CGC Lemonade Stand 3Q F2017. (In $000's)
Dad: Hey son. How's the lemonade business?
Son: pretty good Dad. I sold $9,752.
Dad: Wow! That's pretty good. What did you make?
Son: Well, the lemons, sugar and water and other production costs (cost of goods sold) were $10,950.
Dad: So you lost $1,198?
Son: Well no. You see I picked some more lemons (harvest).
Dad: How does that make any difference?
Son: My accountant says I get to add back the value of what I grew during the period after Harvest (non cash gain on biologicals) even though I didn't sell it.
Dad: How much did you grow and not sell?
Son: $18,141.
Dad: So how much does the accountant say you made?
Son: $16,493 (gross profit), crazy eh? Especially given my sales were only $9,752.
Dad: How much inventory do you now have?
Son: $50,958.
(Dad Opens garage and is confronted by boxes - floor to ceiling - of lemons)
Dad: Son, how many lemons are in here?
Son: if I sell at the same pace as last quarter ... 15 months. If I double my sales 7.5 months. But don't worry I have a HUGE harvest tomorrow too.
NOTE: I do not have a short position in WEED.
Their YTD loss is $36.4 million (MORE THAN THEIR SALES) when you back out accounting shenanigans.
When life gives you lemons...