The liabilities on the balance sheet relate to customers who have paid in advance but the goods haven't been shipped. They're classified as liabilities because if they don't ship the products the cash has to be repaid.
There are very little actual trade liabilities on the balance sheet relating to inventory purchases. So either the raw materials for those shipments haven't been ordered & received yet or they're waiting to manufacture / ship them. If it's the first then further cash for those orders needs to be paid out, if it's the second then it's likely there aren't any further material outgoings for those orders.
Either way they have received cash in q2 that relates to q3 therefore they have to make up for that shortfall (with more cash receipts) in q3 to cover the cash outgoings for q3, if that makes sense.
The good news is that ZNO was able to get it's customers to finance it's business by paying upfront rather than giving long credit terms, maybe a middle eastern customer?
I'm not really concerned with the company having a strong positive cashflow at this stage with it growing so strongly, it will come naturally with a well run profitable business.
ZNO Price at posting:
23.0¢ Sentiment: Buy Disclosure: Held
