Interpreting Financial Results

BUSINESSNEWS

A Ledge Edge Capital Tip On Interpreting Results Reporting

​Ledge Edge Capital, a private equity firm managing over $3 billion in assets, was kind enough to share a little wisdom with us.

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Our Take:

Public and private businesses engage in this quackery all the time.

Check your LinkedIn feed for confirmation.

You'll see stuff like "we've grown our balance sheet 181%", which means nothing. Apart from that, they have nothing worththy to report.

This sort of thing can unintentionally lead you to think everyone else is doing well, but you; or the companies you've invested in are doing better than they are.

It's all deception.

The next time you read an annunciation of business results, first refer to Ledge's hierarchy of results.

CROWDFUNDING

GoodFor Quietly Announces Another Capital Raise

​GoodFor the snacks and wholefoods refillery just announced another capital raise.

Hidden in the fine print of their FY23 update (why would their investors need to know about it anyway…), they mention needing a further $710,000 from a pre-emptive rights raise (whatever that means) to launch the Slowly range - which their entire last $2.2 million raise hinged on…

"Our group forecasts hung heavily on Slowly launching earlier this year. This has led to the need to re-forecast and raise additional funding, as the container capital has ended up funding GoodFor's negative cash flow. "

But then further down the update in the extra fine print, they say only $150,000 is needed to bring the slowly range to market; the rest will go towards opening 3 new stores, shady much...

Given 90% of their current revenues and expenses are store related and are predicted to generate a loss of $500k for 2023 - are more stores really the play here?

Just 18 months down the track from raising $2.2 million via The Snowball Effect, 'unexpected headwinds' has magicked away all that money and cut their future projections by >50%.

…has anything really changed in the past year economically that your local butcher couldn't have told you about.

Our Take:

Full disclosure we invested in GoodFor, which is how we have access to their financial results and updates.

And we knew this was a risky bet, slash we called bullshit on their projections before investing, which to The Snowball Effects credit, they agreed with us on.

We've made many bold predictions in our businesses that haven't come true, so failing to deliver is not the disappointing factor here. It's their failure to be transparent.

Someone or bodies willing to hide the facts is not the type you want to be in business with.

Like that saying goes, when there's smoke, there's fire.

WHAT ELSE

• ​Ethique founder Brianna West shares her New Zealand specific capital raising tips​

• Many of New Zealand's top start-ups are taking advantage of the cheap labour summer interns offer to scout for top talent.

• ​First table is raising money via crowdfunding platform The Snowball Effect

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