I’ve taken a very conventional approach for estimating revenue and COGS (Cost of goods sold). I have used Q3-FY20 (March Quarter) numbers as my benchmark as that is the only quarter that highlights the 'current' level of demand. The following are the key ratios I have used for my assumptions:
- Percentage of Cash receipts to Revenue
- Gross Profit Margin
- 'Cash Receipts' gross margin
So the April Revenue was in excess of NZ$11M. This, however, does not reflect the potential strength of the sales from the new distribution agreements (e.g. Rentokil Initial) and commercial cleaning companies (as only now and recently are COVID-19 restrictions being lifted). Also the trial with Hong Kong airport could lead to sales, and same goes for other companies/trials. Therefore, I personally do believe the revenue for next 2 months will be slightly greater. However, I cannot see into the future and revenue could be even greater than expected or less. But personally I do see revenue for the June quarter to be between NZ$30-40M. So in the following tables I have used NZ$30M, NZ$35M and NZ$40M.
The Cash Receipts and COGS I have directly inputted into the Cashflow report. The remaining accounts I have either used the same value from the March Quarter or increased. Overall, the other accounts do not have much of an impact on the net cashflows, and thus they are just rough estimates and some I haven't included. The Cash and COGS will have the biggest impact on the net cashflow, and so I used the assumptions to maintain some form of 'accuracy'.
Summary:
- 1) My numbers have key assumptions such as the ‘cash to revenue ratio’ and Gross Profit margin.
- 2) The revenue and COGS are calculated under the assumptions.
- 3) The minimum revenue of NZ$30M can possibly provide NZ$19M in Cash receipts and a Net cashflow from operations of NZ$6.6M. Overall, this can increase the cash and cash equivalence to NZ$12.3M
