valuation, page-7

explanation on the negative cash flow from roger montgomery's blog:

Quote:

MCE has reported a strong accrual profit but operating cash flow is negative by -6.2m. This is due to a reversal of an approximately $30m deposit which was received in FY10. Think of the deposit like a deferred revenue item ? cash is received prior to revenue being booked in the P&L. So the revenue was booked in the current period but the cash had been received in the previous period. This can be seen under current liabilities; ?Progress Claims and deposits?. My understanding is that this came about as a customer was willing to pay a substantial deposit to move up the order book as Malaga was running at full capacity last year and the customer wanted to ensure their order would be filled in a timely fashion.

End Quote

cheers