Elite Pharmaceuticals Inc (ELTP)

[no2koolaid]

I said this before but it is clear it needs a reprise to capture this Q…

In 2013, Elite was illiquid and incapable of getting bank funding. In fact, longer term, without increased revenues Elite was looking at potential bankruptcy. But that is more than increasing revenues, it was about controlling costs and increasing margins…and it is to have current assets that offset liabilities. When the record breaking FY 2020 came around, we saw Elite had turned things around not merely by increasing revenues but by controlling costs. For example…

In 2020, Total Current Assets = $10,251,279
Total Current Liabilities = $8,639,548
Thus: 10,251,279 / 8,639,548 = 1.19

This is > 1.0 that is the benchmark against which companies fiscal management is measured. Anything beyond 1.0 removes concerns about immediate economic viability and meant Elite had the ability to pay its short term debt; that which is most pressing.

NOW…Let’s turn to Q3 2021…

Current Assets were $14,539,170. Current liabilities were $7,242,350. The math is simple and shows Elite’s ability to pay its short term debt at 2.008 X or almost double of their previous record year. Is there any confusion that Elite’s financial position is increasingly better? If so, there should not be.

So, how about one more metric?

For FY 2020, Elite’s Total Revenues = $17,994,639. In 2021, revenues through three quarters were $20,985,218. That means Elite has already beaten 2020’s record revenues by $2,990,579…and, if they come in with even “just” another $6 M in revenues, they will have beaten their 2020 record by nearly 50%.

The problem with that is what?