True. But business and their cash transaction do go beyond the end of financial year.
As, I think, I pointed out before. Though the net current asset in MRM's book was a negative, management did make certain worst-case assumptions (like the $11.3M allowance for uncollectable debt). That's very conservative given that that's a big amount of cash and they haven't given up on collecting yet - that and the industry's payables is around 100 days (I know MRM claims 30 days but in reality, even my business get pays in "45" days and clients are usually late by 2 months easy).
So if we imagine that the cash and operating position continues after the FY, certain liabilities can be pushed back and certain income post-FY can come in to save the day. Like that $10M for that one boat.
So while bankers got to be paid, the tax office they can delay a bit.
I mean, businesses do have tough times. MRM's financial position isn't that drastic that it'd just go broke. Remember that it does not need to pay the entire $380M or else! $200 to $250M debt are its usual capital structure management.
MRM Price at posting:
27.0¢ Sentiment: Buy Disclosure: Held
