Background/acknowledgements:
1. This new thread is to move this type of discussion away from the media thread.
2. I've no training in accountancy - so this is maths not accounting.
3. The following analysis is based on the last six quarterly's.
4. It would be better to analyse half yearly's but there is not enough data.
5. Mathematical modelling is usually better than guessing, but it is just a model and projections are unreliable.
6. There is no consideration given to seasonality in this analysis (ie Christmas selling etc)
6. Removing R&D refunds (suggested elsewhere) creates false data as these refunds are income and do refund a portion of outflows in R&D and IP. Hence, I've smoothed the refunds to quarters, proportional to the determining outflows.
7. Both receipts and outflows have been modelled as exponentials. The fit with receipts is high, as can be seen visually, the fit with outflows, not so high. Fitting linear or parabolic models to outflows brings the intersection earlier, so this modelling chooses a more conservative option.
8. The models are fairly robust over the short term. Putting aberrant values in for next quarter does not change the big picture a lot.
9. This modelling is based on six quarters. Projecting it forward six more quarters makes it very unreliable.
10. Re-read 9. This is a discussion post, not a reliable projection.
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If this modelling were correct, and nothing changed in the interim, receipts would be greater than outflows for the 4th quarter 2019. Six quarters away.
In the meantime, about $9m would cover the losses.
Discuss
Personally, I'm not invested in Nuheara as an accountancy exercise right now. I will look at my ROI in maybe 5 or 10 years time. I'm in for the risk/reward ratio. Perhaps what this modelling does is help show the risk is no longer of any investment being "lost", its more about how patient you are to wait for the reward, and what blue sky potential you see in the reward.
(20min delay)