RE:RE:Trading after Q2 results correctedSugoioi wrote:
Thanks for your diligence Stan. I'm assuming, but would like to confirm with you, this would be why their cash on hand increased?
Just cursory I did not understand how cash had increased with the original loss reported.
Hello Sugoioi,
Cash at March 31, 2021 was 2,021,000 and this fell to 1,908,000 by June 30, 2021.
What has been interesting is the incease in the Accounts Receivable balance as sales have increased:
March 31, 2020 $975,000
June 30, 2020 $1,676,000
December 31, 2020 $3,170,000
March 31, 2021 $3,466,000
June 30, 2021 $6,020,000
The Company is clearly providing "financing" to its farmer customers by way of generous terms on the upfront fertilizer costs, waiting for crop sales to have the cashflow to pay the outstanding AR to Verde. Given Verde earns almost nothing on its cash on hand, this would appear to be a good use of its excess cash reseources, other than accelerating the repayment of bank debt at interest rates that run from 10.46% to 17.35% (see Note 11 in the FS).
Cheers.
S.