dogs of today! gems of tomorrow! vmg , page-95

Stash,

First of all they aren’t referring to a quarter, they are referring to the first half of the current financial year.

Secondly, operating cash flows include payments to suppliers and employees – so the MD’s salary and employee salaries are actually already included in these cash flows.

Net cash flows USED in operating activities for the 6 months to 31 December 2011 were $13.18 million, so incredibly we actually have an improvement in the cash flows of the business. Net cash flows used in operating activities were $16.3 million for the year ended 30 June 2012, implying that net cash flows used in operating activities for the 6 month period between 1 January 2012 and 30 June 2012 were $3.12 million.

If you are worried about ‘hidden’ liabilities then take a look at the commitments and contingencies note in the half year accounts when they are released.

The write down of intangible assets doesn’t mean much as it has no impact on the cash flows or prospects of the Business going forward. The concern is that by writing off intangible assets and deferred tax assets it implies that management have written down the forecast future cash flows (i.e. profits) of the Business.