Declining sales QoQ, yet huge increase in inventories
Audit committee - that's the inventory seen man...there's that unseen inventory you know the ones parked in the lot do we count that ?
software programer 1 - I don't understand this new fan dangle software....( snort ), where do you input the credits on the credit side or the debit side of the ledgers. software programer 2 - what's a ledger ( chomp chomp , eating brownies )
Audit committee - When did they , like , do the physical audit ? Oh still on going...groove man now was that like 1 million or 2 million extra c cups ???
Dude...(inhales)...how many times do I have to tell ya, it's k cups not bra sizes.
GMCR management can always claim the fraudulent accounting of intercompany sales and transfer as not intentional, but due to material weakness of the accounting infrastructure that lags the rapid growth of the company.
This is how GMCR inflate revenue and accounting profit: sell the inventories to one of the subsidiaries at inflated the price. The sales, which should be eliminated under normal accounting, are booked at a inflated transfer pricing to boost accounting profit. By virtual of shifting inventories from one warehouse to the next, the same amount of inventories increases in value. That explains why inventories have been increased at an incredible pace, while the company is claiming it has reached its production capacity and has to increase CapEx to raise capacity.