The real reason this fell over is lack of cashflow via a a slowdown is sales. Sales finance and debtor finance facilities like those offered by FC Capital facility pull forward cashflow from agreed and committed sales. If you want to look at a cause for the company failure look to the sales team, and how they were actually generating cashflow and income.
Hubris and lack of sales caused this company to fail. Looking for someone to blame is a natural emotions when people lose money. Remember accountants record history, Auditors check history. Lawyers are trouble makers, Stockbrokers predict the future, ASIC checks reality of company statements. And punters who invested in this company and any other company need do their own research and make judgements to invest only have themselves to blame if it falls over. Lessons have been relearned and it will happen again.
Basically the company believed their own bullshit ('HUBRIS) until someone (ASIC) checked them on it. and they ran out of lemmings who were prepared to finance their sales via FC capital.
Meaning of Hubris below-
hubris
ˈhjuːbrɪs/ noun
excessive pride or self-confidence.
"the self-assured hubris among economists was shaken in the late 1980s"
Column 1
Column 2
0
synonyms:
arrogance, conceit, conceitedness, haughtiness, pride, vanity, self-importance, self-conceit, pomposity, superciliousness, feeling of superiority; More
Column 1
Column 2
0
(in Greek tragedy) excessive pride towards or defiance of the gods, leading to nemesis.
BIG Price at posting:
$2.22 Sentiment: None Disclosure: Not Held
