Q3 rev?, page-7

Half year is based on revenue which is (generally) recognized when an invoice is issued. The quarterly is a cash flow statement and recognizes cash when it is received. The quarterly does not have a revenue figure. There can be big differences in cash flow cf revenue where the invoice may not be paid for 90 or 120 days.

For example, if an invoice is issued on 29 December for $100k then the half yearly accounts would have revenue of $100k (a P&L item) and a receivable (as a balance sheet item) of $100k.

When the cash is received the receivable is replaced by the cash (also a balance sheet item). When the $100k cash is recorded in the quarterly will depend on when it is received. If it is received on or before 31 march (and after 31 Dec) it will be in q3 otherwise it will be in q4 (assuming it is received by 30 June).

Given the above, I would be cautious in trying to equate revenue and cash as both the cash flow and revenue will be lumpy given the timing of when invoices are issued and cash received. That said, I expect that cash flow from sales will increase in q3 cf q2 as cash from the trials should be received. The big cash inflows should start in q4 and even q1 16 as Walmart et al begin to pay invoices from the stocking of thier stores in q3.

The flip side is that as stock is built up cash flow can be highly negative even though the company is profitable. Hence the need for the quarterly statements.

Apologies if I have stated the obvious but I fear that some posters may have misinterpreted the accounts cf the quarterlys.

DYOR, NFA, ETC.

BSP