It is always interesting in reading the financial accounts ofan...

It is always interesting in reading the financial accounts ofan accountancy firm and seeing how they cook their books, as distinct to thebooks of their clients.
My business view is that it is not a profit until the moneyis in the bank, so it was pleasing to see the fanfare given to the cash at bankincreasing $1.2m to $10.2m in the CEO report.But the Statement of Cash Flow, has the cash generated from operatingactivities was down $217k to $3.69m then there were cash outflows of $1.92m forinvesting activities and $1,352 for financing activities leaving a net positivecash flow of $425k for the six months.If the lock up has reduced, and firm returns have increasedhow is this so?
Oh! the cash flow says the cash at 30 June 2018 was $10.998mand it is now $11.423m and this agrees to the Statement of Financial Position.Then to read ‘YES’ at long last there is to be a dividend of$1.114m to be paid out of the net cash of $425k that has been generated for the6 months before income tax is amazing.
So the accountants are paying a cash dividend 2.6 times thecash they generate before tax.But this what they have been doing since day one.
The Equity of the group is Contribution Equity $121.583m butthe losses are $58.964m leaving net assets of $62.619m.There is a concept called the Ponzi Scheme where newinvestors are encouraged to invest for dividends. CUP has done just this, theyraised $121.583m paid out dividends that came out of the capital of the original investors of $58.964m and profits of $6.815.
It never ceases to amaze me the creativity of these CUPaccountants and auditors. Has to be worth some award from the ASX or ASIC.