Ann: Appendix 4C- June 2021, page-21

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everglass

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26/07/21

15:16

Post #: 54779687
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Originally posted by wangj: ↑

Hello, hello, hello, some fellow shareholders, please don’t confuse two totally different things between Profit/Loss statement with a Cash Flow statement. I said many times in the past about this – one cannot work out profit and loss from cash flow! They are two different things. Let me try differently this time. Let’s use an example – a company ABC sells only cables for simplistic sake:

At beginning of the quarter, It bought 10 cables at $10 each and paid for $100 to the supplier.
It sells it for $14 each, so a profit of $4 each cable.
At the end of the quarter, it sold 5 cables, so it made $20 profit from total income of $70 (5 x $14)
So far, this company has made a profit, but now let’s look at its cash flow during the quarter:
Cash outgoing = $100
Cash inflow =$70
So the cash flow is -$30 – note this is negative.

So what it means:

1.Thecompany has made a profit.
2.Thecompany still has 5 cables left ($50 in inventory) for sale for next quarter.
3.Thecompany received less money during this quarter than it spent – hence negative cash flow, but it may become positive next quarter because if it sells all 5remaining cables, it has no more supplier to pay and will have a $70 pure cash inflow.

I hope this time, it is much clearly. In the situation of HT8, per company’s announcement, it simply acquired more inventory in order to sell a lot more during the quarter and the next as explained again by @CaptainSteve ,@smallcapplayer and @68regit. That’s the story.

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Thank you Wangj, that is a very good explanation. Would you have expected the SP to have dived almost 12% however?

Last edited by everglass: 26/07/21

HT8 Price at posting: 11.5¢ Sentiment: Buy Disclosure: Held
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0 Great analysis

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Ann: Appendix 4C- June 2021, page-21

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