Q2 2025 Results (Post 4) Current assets and liabilitiesWhile the October 31, 2024 Cash balance of $2,932,177 represents a high water mark (possibly the highest quarter end balance in the Company's history, albeit I have not yet been able to source the financial statements from 2007 through to 2014 when the Company was operating as Ashburton Ventures) I still like to examine the cash flow statement to compare and assess management performance in how they optimize capital allocations.
The change in cash during the first half of 2025 was an impressive $1,246,371 addition. However, if you remove the one time proceeds of disposition of property, plant and equipment of $1,284,500, then the rest of the activities net our to an overall drop of $38,129.
On the use of funds side, changes in non-cash operating working capital saw a $624,355 use of cash, made up primarily of the following two categories:
Accounts receivable $382,416 28.5% increase
Inventories $186,035 7.4% increase
I had hoped to see continued reduction in these two categories after the recent improvements over the past year. To see A/R back up by 28.5% is a disappointment which I hope will be addressed and reversed by January 31, 2025.
Inventories remain a bit of a puzzle to me, with the dollar value of the "supplies" inventory ($1,487,837) being larger than the combined value of raw materials and finished goods ($1,218,621). When operating as Absorbant Products Limited, supplies inventory stood at $262,308 or less than 18% of the current supplies inventory value.
I hope the significant free cash balance held at October 31, 2024 will not take the pressure off efforts to optimize receivable and inventory balances, especially when we still have outstanding loans to be paid down.