RE:RE:RE:RE:RE:RE:RE:RE:I don't remember reading about THIS? I see in VG's balance sheet that their Retained Earnings decreased from $122 million in Q4 2023 to $113 million in Q1 2024. So perhaps they tapped that $9 million for a portion of the January slide costs and the rest was maybe covered by the $8.5 mil equity raise and the tapped a bit of cash for the rest. The retained earnings decrease is generally the result of a loss in net earnings so maybe I'm counting the $9 mil twice. I'm no accountant but I know that accountants can be very good at finding ways to use 'creative accounting' techniques (legally of course)..
Then there's the question of the remaining $113 million in Retained Earnings as at the end of Q1. Is that equity they can still somehow tap and use for events like this? This is what Google says about Retained Earnings....
Retained earnings - Google Search Do retained earnings have any value in the event of bankruptcy? - Google Search Add $113 million in retained earnings to the ~ $40 cash and whatever gross profit they made in Q2 and are holding by not paying their debt and Q2 operating expenses that they are believed to have managed to withold and is it possible they can avoid or at least hold off filing for bankruptcy longer than some here believe? Again, I'm no accountant but if someone here is and can weigh in it would be interesting to get their take on this.
In the Google link it talks about what happens to RE when a company is dissolved that the Retained Earnings get distributed to its members. I'm guessing it's not too likely this includes Common share holders, more likely the Class A and Preferred shareholders.
What happens to retained earnings when you close a business?
Retained earnings reflect the income/loss of the company, but are also reduced by distributions to the members. In the year a company dissolves, all assets are distributed and retained earnings are reduced to zero.Apr 5, 2021
My opinion only.
HB77