KOOV : hmmm

Koov is an online retailer for the Indian market. You can check out their website here: http://www.koovs.com

I took the briefest of looks at their report and accountts for y/e 31 March 2016:

http://www.koovs.com/corporate/wp-content/uploads/2016/08/Annual-Accounts-FY16.pdf

One thing stuck out at me pretty much straight away when I was looking at Stockopedia, and thought I’d need to see the primary sources for confirmation …

In year to 31 March 2016, they had revenue of 512.4m INR (page 25). In note 21 on page 52, they list trade payables as 213.0m INR. So what we’re saying is they have nearly 5 months of trade credit (12 * 213/512.4).

That seems to me, if I might be so bold as to suggest, to be extraordinarily generous on the part of their suppliers.

I expect at this point that I’ll be accused of not understanding how India business works. Let me save my detractors some time: damn right!

I suspect that if I dug down further into their accounts I might find other eye-raising tidbits. But Stargate SG-1 beckons, so I’ll leave you to draw your own conclusions on that one!

Stockopedia StockRank 9. Just sayin’.

Stay safe out there, read Paul Scotts regular reports on Stockopedia, and don’t forget to floss.

Quickie update 05-Jan-2017: I see that KOOV make a gross loss. In other words, even ignoring operating expenses, they sell goods at less than they buy them for. As the joke goes, presumably they hope to make it up with volume.  Ernst and Young are auditors on this. I’m not up-to-date with auditor reports, but they said that the financial statements give a true and fair view. They do give an emphasis of matter which state “note 2.4 indicate the existence of material uncertainties which may cast significant doubt about the company’s ability to continue as a going concern” (emphasis mine). Note 2.4 is quite long, and the key seems to be in section 2.4a  headed “Going concern”. Basically, it’s saying that the company is reliant on raising more capital, and if that doesn’t happen, they’ll be broke. On 17 November 2016, they disclosed funding from The Times of India Group. My take: it looks like KOOV is in no immediate threat, in that case. Cash burn is significant in KOOV, and looks set to accelerate. I presume they’ll need to raise more cash later this year. I’m really just skimming through all this at high speed, though.

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About mcturra2000

Computer programmer living in Scotland.
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