Tomorrows Quarterly Production Report, page-60

Platinum working capital affects your cash position.

As an example, at the start of a period I have $1m cash, $1m debtors, $1m inventory and $1m creditors.

I then generate $5m in sales revenue for the period, and my costs equal my sales revenue (based on accrual accounting), and you didn't raise capital for the period, and assume for demonstration that your capex is equal to your depreciation. So a break even result and net assets have not changed. However the breakdown of your net assets may change dramatically due to timing of receipt of invoices, timing of payment of invoices and timing of purchase and sale of your inventory.

In this example a big customer paid their invoice just prior to year end, reducing your debtors position to $500k. You haven't purchased inventory for a few weeks and have shipped a lot recently, reducing your inventory balance to $500k. You delay paying creditors until the first day after the year end, increasing your creditors balance to $2m.

These movements in debtors, inventory and creditors have therefore increased your cash position to $3m, even though you only broke even for the period and your net assets haven't changed.