Material Doubts Regarding Going Concern and Operating Cash Flow Deficit
First written in FY2021. 5 of 13 entries say "Mitigated", first in FY2022-Q1. Latest entry: FY2024.
The whole theme swung hardest in 2020: 30 of 70 companies on the "Worse" side.
11 other companies' latest entry also says "Achieved".
- FY2024AchievedAnnual report
「Based on these circumstances, we believe that, as of the end of the fiscal year, the events or conditions that may raise significant doubt about the going concern assumption have been resolved.」
After recording losses since the fiscal year ended February 2020 and negative operating cash flow since the fiscal year ended February 2021, the Company recorded positive operating profit and operating cash flow in the fiscal year ended February 2024 and disclosed that the material doubt related to the going concern assumption had been resolved. - FY2024-Q3MitigatedAnnual report
「As a result, during the cumulative third quarter, revenue was ¥2,156 million, operating profit was ¥15 million, ordinary profit was ¥13 million and quarterly net loss was ¥6 million, representing a significant improvement in profitability from the same period of the previous year. For the full fiscal year, the Company also expects to return to profitability, with revenue of ¥2,920 million, operating profit of ¥66 million, ordinary profit of ¥64 million and net profit of ¥30 million.」
While recognizing recurring losses and negative operating cash flow, the Company cites the return to operating and ordinary profitability during the cumulative third quarter, improved profitability and the expected return to full-year profitability as factors improving the material events. - FY2024-Q2MitigatedAnnual report
「During the cumulative second quarter, revenue increased year on year in the Consulting Business and the DX and regional co-creation business, improving gross profit. The Company also worked to reduce costs by optimizing research and development activities and reviewing expenditures across selling, general and administrative expenses. As a result, it recorded operating profit in the second quarter and operating cash flow improved significantly year on year, with this trend expected to continue from the third quarter onward.」
While recognizing recurring losses and negative operating cash flow, the Company cites increased revenue, cost reductions, a return to operating profitability in the second quarter and improved operating cash flow as factors improving the situation. It also has liquidity of ¥1,176 million on hand. - FY2024-Q1RestatedAnnual report
「The Company has recorded operating losses, ordinary losses and net losses since the fiscal year ended February 2020. Operating cash flow has remained negative since the fiscal year ended February 2021. In response, since the end of the fiscal year ended February 2021, the Company has recognized that events or conditions exist that may raise significant doubt about the going concern assumption. Nevertheless, it has determined that no material uncertainty related to the going concern assumption exists, based on the factors below and the implementation of measures to eliminate or improve these events.」
While continuing to recognize recurring losses and negative operating cash flow, the Company reconfirms its determination that no material uncertainty exists based on high liquidity, demand for consulting services, improved profitability in the Innovation Business and increased employee engagement. - FY2023MaterialisedAnnual report
「The Company has recorded operating losses, ordinary losses and net losses since the fiscal year ended February 2020. Operating cash flow has also remained negative since the fiscal year ended February 2021.」
In FY2023, the Company recorded an operating loss of ¥110 million, an ordinary loss of ¥119 million and a net loss of ¥132 million, while operating cash flow was negative by ¥184 million. Operating, ordinary and net losses for the 4th consecutive fiscal year and negative operating cash flow for the 3rd consecutive fiscal year have been confirmed as actual results. - FY2023-Q3WorsenedAnnual report
「For the fiscal year ending February 2023, the Company forecasts an operating loss of ¥90 million, an ordinary loss of ¥99 million and a net loss of ¥112 million. Although these figures represent a significant improvement from the fiscal year ended February 2022, the Company expects to record operating, ordinary and net losses for the 4th consecutive fiscal year and negative operating cash flow for the 3rd consecutive fiscal year.」
For the fiscal year ending February 2023, the outlook changed from the previous plan to return to profitability to forecasts of an operating loss of ¥90 million and other losses. The Company expects operating, ordinary and net losses for the 4th consecutive fiscal year and negative operating cash flow for the 3rd consecutive fiscal year. It also states that the ¥1,398 million in cash on hand secures the funds required to continue operations. - FY2023-Q2MitigatedAnnual report
「Meanwhile, cash and deposits at the end of the cumulative second quarter were ¥1,475 million. As the Company has secured sufficient funds to cover the expected negative operating cash flow, capital expenditures and loan repayments for the fiscal year ending February 2023, it has determined that business continuity will not be hindered.」
While maintaining its expectation of negative operating cash flow for the 3rd consecutive fiscal year, the Company has determined that it has sufficient funds to cover planned expenditures and that business continuity will not be hindered, supported by cash and deposits of ¥1,475 million. - FY2023-Q1MitigatedAnnual report
「Meanwhile, cash and deposits at the end of the first quarter accounting period stood at ¥1,285 million. As sufficient funds had been secured for the negative operating cash flow planned for the fiscal year ending February 2023, capital expenditure and debt repayments, the Company judges that there is no impediment to business continuity.」
While continuing to expect negative operating cash flow for the 3rd consecutive fiscal year, the Company has determined that it has sufficient funds to cover planned expenditures and that business continuity will not be hindered, supported by cash and deposits of ¥1,285 million. - FY2022MaterialisedAnnual report
「The Company recorded operating losses, ordinary losses and net losses from the fiscal year ended February 2020 through the fiscal year ended February 2022. Although cash and cash equivalents at the end of the fiscal year ended February 2022 increased from the end of the previous fiscal year, operating cash flow was negative for the 2nd consecutive fiscal year. For the fiscal year ending February 2023, the Company forecasts operating profit of ¥26 million, ordinary profit of ¥22 million and net profit of ¥16 million, and plans a significant improvement in profitability, but operating cash flow is expected to remain negative for the 3rd consecutive fiscal year.」
Operating, ordinary and net losses for 3 consecutive fiscal years and negative operating cash flow for 2 consecutive fiscal years have been confirmed as actual results. Although the Company presents a profit plan for the following fiscal year, operating cash flow is expected to remain negative for the 3rd consecutive fiscal year. - FY2022-Q3RestatedAnnual report
「As a result, we expect to record operating losses for 3 consecutive fiscal years and negative operating cash flow for 2 consecutive fiscal years. Based on these circumstances, we recognize that events or conditions exist that may raise significant doubt about the going concern assumption. However, from a financial standpoint, we have sufficient cash on hand to cover the near-term expenditures planned in the business plan, and believe that business continuity will not be hindered because we will implement the measures below to eliminate or improve these events. Accordingly, we have determined that no material uncertainty related to the going concern assumption exists.」
While continuing to recognize the expected operating loss for the 3rd consecutive fiscal year and negative operating cash flow for the 2nd consecutive fiscal year, the Company reconfirms its determination that no material uncertainty exists based on cash on hand and measures to strengthen its sales structure, manage research and development expenses and manage funds. - FY2022-Q2WorsenedAnnual report
「Based on progress during the cumulative second quarter and a review of plans for the second half, the Company revised its full-year earnings forecast for the fiscal year ending February 2022, announced on 12 April 2021. Revenue is forecast at ¥2,050 million, down ¥120 million from the initial plan. On the profit side, ¥300 million in research and development expenses and other selling, general and administrative expenses is expected in the Innovation Business, resulting in an operating loss of ¥460 million, down ¥225 million from the initial plan, an ordinary loss of ¥465 million, down ¥227 million, and a net loss of ¥360 million, down ¥102 million. As a result, the Company expects to record operating losses for 3 consecutive fiscal years and negative operating cash flow for 2 consecutive fiscal years.」
The earnings outlook deteriorated, including a revision of full-year revenue from ¥2,170 million to ¥2,050 million and the operating loss from ¥235 million to ¥460 million. The Company also expects an operating loss for the 3rd consecutive fiscal year and negative operating cash flow for the 2nd consecutive fiscal year. At the same time, it maintains its determination that no material uncertainty exists based on cash on hand and improvement measures. - FY2022-Q1MitigatedAnnual report
「As a result, we expect to record operating losses for 3 consecutive fiscal years and negative operating cash flow for 2 consecutive fiscal years. Based on these circumstances, we recognize that events or conditions exist that may raise significant doubt about the going concern assumption. However, from a financial standpoint, we have sufficient cash on hand to cover the near-term expenditures planned in the business plan, and believe that business continuity will not be hindered because we will implement the measures below to eliminate or improve these events. Accordingly, we have determined that no material uncertainty related to the going concern assumption exists.」
While continuing to recognize the expected operating loss for the 3rd consecutive fiscal year and negative operating cash flow for the 2nd consecutive fiscal year, the Company has determined that no material uncertainty exists based on cash on hand and measures to strengthen its sales structure, manage research and development expenses and manage funds. - FY2021First statedAnnual report
「Based on these circumstances, we recognize that events or conditions exist that may raise significant doubt about the going concern assumption.」
The Company has newly disclosed as a separate item the material uncertainty related to the going concern assumption, based on operating losses, ordinary losses and net losses, negative operating cash flow and expected losses in the following fiscal year.