Falling from grace, page-66

OK I'm not an account but have been involved in company taxes having been a director of three so i have skin in the game so to speak. I'm talking budget and provisions. The NPAT and free cash is not a static thing. BPT will make assumptions about their revenues for the year and that will form the basis of their budget going forward. That budget will also include wages and other expenditures plus dividends and that will give them an idea of what they can spend. They may have cash in the bank and can allocate that to the budget and they may have even paid for por booked some of the capex up front and accounted for it. If I had $1m in the bank but have booked $500K of work I cannot say I have $1m free cash. My budget might be $5m and if you take a snap shot you would say my god how are they gonna pay for that. But if you read down the page expected revenues might be $6m. It's all to do with cashflow

Your question was how can BPT have Capex of $1b when they only have $4xxm free cash. On a nominal basis they can't but what I'm saying is what they have in the bank plus what their revenue forecast is might explain it.

i haven't touched on things such as depreciation or write off provisions but we will end up down the rabbit hole on that.

Cheers
BW