How Much cash is burnt in Mar 18 Quarter?, page-19

Hi Tommy,

Regardless of the semantics, the numerical interpretation of your statement that debtors = receivables is as follows:

As at Dec 31st: (in 000's)

Cash: $8,256
Receivables: $4,718
Past due but not impaired: $407
Cash + Receivables: $12,974

As per recent Preso: (in 000's)

'Cash + Debtors': $5,700

March 4C Expense forecasts (per Jan 4C in 000's):

Forecast Expenses: $11,790

For $12,974 to become $5,700 we would need to have had a change in Cash + Debtors of $-7,274.

Start with $12,974, subtract forecast expenses of $11,790 = $1,184
Add back receivables collections at say 90% of Dec 31st balance = $1,184 + $4,246 = $5,430.
So to get to our balance of $5,700 cash + debtors, we only needed to have collected $270 in the march quarter. Seems highly unlikely given that all other quarters have converted 50 - 60% of revenue booked in the quarter to cash.

So for this debtors = receivables interpretation to hold true, we would need either a) a MASSIVE expense blowout over and above forecast, b) TERRIBLE receivables collections, and a massive blowout in 'past due but not impaired' accounts, or c) revenue to have gone backwards to the tune of 20 - 25%.

I don't see any of those options as being highly likely, so i'm forced to adopt the position that 'debtors' should be interpreted as 'past due but not impaired' for the purposes of this exercise.
ie: Would have been cash if clients payed their bills on time.