KulaRaha wrote:2012 wrote:obiero wrote:Chaka wrote:May be the cash needs to earn interest?
GEORGEWACHIRA wrote:Sometimes it's hard to understand these guyz everything delivered is paid on credit and yet some products will hardly last onto shelves even a day whats the point of paying such suppliers after three months
Its a cash flow management tactic.. To ensure that the firm is aware of its full obligations to suppliers in advance. However, I do not support delays above the stated credit period
I don't think it's cashflow management. I suspect this is another Chase Bank only instead of depositors you have suppliers and banks. The suppliers are being paid pyramid style, you collect from John to pay Peter etc. the same unsustainable cycle that was employed by Uchumi until collapse. But I wish them well, hope their new investors don't back out after auditing books as has happened before with KK, Orange and Chase.
Correct!!
Shareholders siphon money monthly and that affects even basic cashflow as you can't keep milking a cow that hasn't been rested or fed.
Add employees to that, they steal stocks left right and centre. And because of weak corporate governance and a management style that involves hiding profits to avoid taxes, the directors never get to learn of staff fraud until its too late.
Remember the internal auditor who was shot, I also here many Nakumatt managers already own some tier 2 supermarkets all over Nairobi.
"The purpose of bureaucracy is to compensate for incompetence and lack of discipline." James Collins