I've already explained how the Fictional Revenue/Accounts Receivable scheme works. But I will repeat it again (and I don't think I'm a knucklehead, but that's up for debate).
If you book a million dollar sale to XYZ Company, invoice it, never ship it and don't collect any cash for it, you have one million is sales and one million in A/R on your financials. Keep doing that every quarter and at year end you have 4 million in sales and 4 million in A/R. And no product has ever been shipped.
Normally, in most companies, an auditor would look at the year end A/R aging to verify accounts. They would contact XYZ Company and ask if they agreed with the amount owed and would be asked to verify contract payment terms and perhaps even request to see product in their warehouse. If SB says, no you cannot contact them, then it would be a red flag. If the customer refuses to verify the A/R amount or replies with something materially different, then it would be a red flag.
If you don't do an audit then no one can independently verify anything and you're left having to trust SB at his word?
Can you trust SB at his word right now?
(Let's also assume SB actually shipped a million $ per quarter in sales, but only collected 25% of each quarter's sales. At the end of the year he has 4 million sales and 3 million A/R. You sure need a boatload of cash to pay your suppliers in advance to buy product, ship it in from overseas, ship it to your customer, and then wait a year to get paid in full. It's a losing proposition, especially if you are also buying a pot company, and building a giftcard exchange at the same time...the cash flow is just enough to keep everything going based upon his other expenses).
If you book a million dollar sale to XYZ Company, invoice it, never ship it and don't collect any cash for it, you have one million is sales and one million in A/R on your financials. Keep doing that every quarter and at year end you have 4 million in sales and 4 million in A/R. And no product has ever been shipped.
Normally, in most companies, an auditor would look at the year end A/R aging to verify accounts. They would contact XYZ Company and ask if they agreed with the amount owed and would be asked to verify contract payment terms and perhaps even request to see product in their warehouse. If SB says, no you cannot contact them, then it would be a red flag. If the customer refuses to verify the A/R amount or replies with something materially different, then it would be a red flag.
If you don't do an audit then no one can independently verify anything and you're left having to trust SB at his word?
Can you trust SB at his word right now?
(Let's also assume SB actually shipped a million $ per quarter in sales, but only collected 25% of each quarter's sales. At the end of the year he has 4 million sales and 3 million A/R. You sure need a boatload of cash to pay your suppliers in advance to buy product, ship it in from overseas, ship it to your customer, and then wait a year to get paid in full. It's a losing proposition, especially if you are also buying a pot company, and building a giftcard exchange at the same time...the cash flow is just enough to keep everything going based upon his other expenses).
.Quote:The knuckleheads who keep screaming the revs are fake are not saying that about the AR or notes. If the AR and notes are real, so are the revs
2
