Based on quarter result 31 Oct 2010,
Receivables registered at RM 265 million
Cash and equivalent registered at RM 225 million
Long term borrowing registered at RM 41 million
Short term borrowing registered at RM 287 million
Payable and accruals registered at RM 438 million
What do you see from here?
Receivables and total cash is just slightly enough to cover payable and accruals and with a extra cash flow RM 52 million.
Is this RM 52 million enough to pay the short term borrowing RM 287 million? It seems like Kencana is facing some cash flow problem temporary, but however management is preparing to convert this short term borrowing to long term borrowing. If they manage to do so, then Kencana will be safe.
Always be careful of its cash flow and market environment. Either one will destroy its financial statement. If everything goes fine, then it is a goose that lays golden egg with high petroleum price and incoming projects.
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