Ann: Business Update, page-81

@Yoda2503
I know. Listen to what I am saying carefully-and do it yourself and see what you find.

Create an excel spreadsheet modeling cash-flows based on reported information. Then model in different annual growth rates and find at what point operating cashflow actually exceeds drawdown. You will find it is around annual growth of 30%.

Now, NORMALLY, we don’t get to see real-life modeling in hypergrowth companies like this, but due to seasonality of fashion retail and the short nature of receivables (<60 days on a quarterly reporting basis) we have a unique chance to test the model empirically. And guess what- the clues left by management suggest that it works! There are quite a few assumptions built into this thinking (you have to know what they are), but the empirical test confirms the modelling. This substantially derisks the prospect of business model failure. Ie the chance of this going to zero is now remote. You can see some of the extensive debate we had on these forums from 12 months ago+ under the old tickers- maybe search under valuetrader82 who has gone a bit quiet.

So the reward side of the equation is pretty easy to work out- but essentially taken out a BIG risk (I think probably the biggest). This leaves regulatory risk, bad debts risk and failure to grow risk which are well and truly baked into these prices.

I actually think the current price is possibly the best risk/reward situation there has been in its listed history. Most of the upside still on the table and a lot of the downside is gone...