My thoughts on AHZ, page-177

You are absolutely correct with regards to the cashflow timing, but the reported revenue would have been booked on the day of the order / contract, so the timing of sales doesn't have a great link to the timing of staff payments.

That said, because Adapt products are so high margin, the raw materials cost very little. These are the input products that are likely to be sold to us on an account (ie, we pay for them 30+ days later). However, staff don't work on account, and they make up most of the Cost Of Sales for the Adapt division.

So we incur expenses at the manufacturing stage, the R&D stage, the sales & marketing stage, and the back office stage on roughly fortnightly account terms (assuming thats how frequently staff are paid). However, once we actually book a sale, it will take 30+ days to receive cash from said sale. Crappy for cashflow because we are manufacturing ahead of demand. This should moderate in time, and ash conversion should get better.

The numbers to watch for now are revenue, gross profit and fixed costs. If revenue increases at a good clip, and GP margins increase, we're looking good cashwise (albeit with a slight delay).
Cant wait for that annual report to get some clarity on a couple of things!