@TripleTop thanks for your analysis. Seems capable of raising order even with assumption that trade finance is repaid in your model but cash seems to right tight. Probably one thing to consider in your analysis which will have an impact is labour. They will scale with production (with efficiencies of course) but needs to be paid of on time. Assume other overheads and CAPEX are within the 30days term so could also further impact Cashflow.
Imagine company will hold on to debt given reasonable financing rate as long as they net cashflow positive and comfortable with repayments. For argument sake $10m debt at 5% interest is 500k interest payment which could be considerable. Any insight if trade finance normally needs to meet certain bank covenants?
To be honest relatively surprise that their AR is 60 days average. Contract manufacturing (bulk of revenue) turnaround should be relatively quick.
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@TripleTop thanks for your analysis. Seems capable of raising...
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