Sly has only defulged have the story. One has to examine every quarter cause often one quarter will come up short and have to run too private equity or support or the bank if desperate for capital. Loses and gains in the derivative market can go both ways. A short position were your costs are greater then your consumer debt can be conserning on large ticket items, planes, trucks, boats ect.
This can also be the services of the above noted and not always associated under the same roof.
An example would be a cloathing outfit requiring the service of a trucking outfit. They would pay up front for the service. They would receive outstanding shares for the goodwill. As the service is amortized through out the year the outstanding shares would be returned to the trucking outfit and goodwill sold to equity investors of the apparel company.
So un benounced to the equity holders of the apparel company they have been piggy backed onto the trucking companies financials. This is often referred to as a reverse take over of some portion of the trucking company. The trucking company could as well have many derivative deals in place to offset other crucial accruing costs that need to be fixed to secure a fixed cost to a product or service.
This process allows first a very secure public interest to take place in consumer products, second would be a secure product or service development for new entries into the market place. Yes it does also provide manipulation for new companies to finance a new entry point into a market piggy backing of other services and good will paid much like purchasing a wet lease from a vender for there facility using there goodwill to sell a equity position not ever along money of there own product or services they may offer. In fact often providing a service or product at a loss to get there foot in the door.
The North American consumer market has been mostly dependent on home grown growth except a hand ful that have entered the Asian market by this process. So how does a private out fit to benefit from this process and what equality do the get in this process. Well they are indirectly being financed by others in the public market system without the administration headaches to this process. What they don't get is the diversification a public company gets nor the opportunity to compete on the world market by the support of there home grown market.
The public market system is truly a wonderful place for private as well public companies too compete on a world stage where wages are lower s well commodities and take advantage of all the advantages around the world in every jurisdiction be it at home or abroad.
Now sure there are some who are in a better position then others due to many factors and it is the investor that must pull this information from the numbers given them.
Don't look at just one quarter but every quarter. Graph it out. Watch for the merging of the various debts including your retained earnings and outstanding share debt as well payables and most important your receivables in relation to the others.
Not all debt is consider equal, some truly has an happy ending. You be your own judge don't let others be yours. This company I would exercise plenty of caution but hey don't take my word.
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