I am going to round up to one month, or 1/12 of a year. Then I will apply the 90/10 rule to suggest CCi needs about 1/12 of 90% of its annual revenues in cash. I will take the last quarterly income statement and multiply the revenues by four to get an estimate of current annualized revenues. The quarterly revenues were $349,751 (thousands). The nine month revenue was 1,084,614 (thousands). $350,000,000 times four = 1,400,000,000. Using the nine month revenue, 1,085,000,000 times 4/3 = 1,445,000,000. Both are fairly close, but let's use the lower estimate, since I am using a full month, so $1,400,000,000 in annual revenues times 0.90 divided by 12 = $105,000,000. That's about $1 million per campus. Who is going to lend CCi a cool $105 Million?
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Bankruptcy courts can "claw back" any payments that were made in the 90 days before a bankruptcy, if I remember right. Please don't take my word on this, but there is a claw back period. If the phone company was always paid, but others went unpaid during that 90 day period, then the bankruptcy court will order the funds from the phone company be paid back so the court can pay others. Let's say CCi didn't pay Office Depot, since it felt it could just go without new supplies, but paid the phone company, since that was more important. The court might take some money from the phone company and give it to Office Depot.
I hear you. Higher pay and more employees than I guessed. What will be seen is the priority, who gets the remaining cash? Employee payroll, phone company, debt payments? Seems like Monday will be a telling day.
I hear you. Higher pay and more employees than I guessed. What will be seen is the priority, who gets the remaining cash? Employee payroll, phone company, debt payments? Seems like Monday will be a telling day.
I hear you. Higher pay and more employees than I guessed. What will be seen is the priority, who gets the remaining cash? Employee payroll, phone company, debt payments? Seems like Monday will be a telling day.
Equinox: There are lots of employees in Admissions north or 60K Some with 6 figure salaries
Payroll is not the only need for cash. What if a debt payment is missed? Also CCi needs more cash since they didn't already have enough. Also it is my guess that there is likely a stack of bills to pay. The bottom line is that they would have about $100 million in cash if there was not the delay. Finally based on what I was paid, your estimate is way low. Other expenses include rent, advertising, supplies, and so on. Finally where is the 100 employees assigned to document production? If CCi only needed $20 million, the problem wouldn't be so bad.
I feel your $105M estimate is high because many annual expenses can be ignored for the next critical month. Payroll next week should be top priority to keep moral up. At $30k salary x 50 employees x 100 campuses is $12.5M for a month, so figure $6-10M for next payday. Cash on hand shows $24-28M according to wiki invest and yahoo. Even if you are half right and I'm half wrong, it's gonna be a tough next 3 weeks.