Balance Sheet Analysis & Summary

Executive Summary

The company's balance sheet as of the reporting date indicates a strong liquidity position with substantial current assets ($57.44M), led by significant bank balances across multiple currencies/regions. Current liabilities total $13.29M, leading to a healthy net working capital.
Key highlights include a considerable inventory asset, very high retained earnings, and negative net income for the period. The company’s equity is robust at $43.9M, but recent profitability is negative. There is some exposure to currency fluctuations (Cumulative Translation Adjustment).

Key Financial Ratios & KPIs

Ratio / KPI	Current Value	Description & Interpretation
Current Ratio	4.32	Measures short-term liquidity = Current Assets / Current Liabilities. Interpretation: For every $1 of liabilities, the company has $4.32 of current assets. This is considered very healthy (above 2 is strong); company is unlikely to face liquidity issues.
Quick Ratio (Acid Test)	3.55	(Current Assets – Inventory) / Current Liabilities. Interpretation: Excludes inventory, focusing on most liquid assets. 3.55 is very strong (above 1.0 is safe).
Equity Ratio	76.8%	Equity / Total Assets. Interpretation: Capital structure is dominated by equity, a sign of minimal financial leverage risk.
Debt to Equity	0.30	Total Liabilities / Total Equity. Interpretation: The company is conservatively financed. Leverage is low.
Net Working Capital	$44,148,960	Current Assets minus Current Liabilities. Interpretation: Excellent liquidity reserve.
Return on Equity (ROE)	-2.9%	Net Income / Equity (approx). Interpretation: Negative, due to reported loss. Indicates no return generated for shareholders in the current period.

Notable Accounts and Items

Inventory Asset: $10.06M — Inventory makes up ~17.5% of total assets; consider reviewing inventory turnover for efficiency.
Operating Account - US2: Negative balance ($3,186.77) — overdraft position; investigate reason and monitor.
Payroll: Negative ($190,000) — likely accrued payroll liability posted wrongly under assets; clarify accounting treatment.
Accrued Expenses: $2.94M — review breakdown to ensure accruals are accurate and not stale.
Deferred Revenue: $1.38M — advance payments from clients; strong indicator of revenue to be realized.
Net Income: Negative ($1.28M) — may warrant deeper analysis of income statement for recent losses.
Cumulative Translation Adjustment: ($3.14M) — significant, suggests currency fluctuation exposure.
Customer Deposits, Trust Funds: Minor compared to asset base, low risk.

Trends, Anomalies, & Risks

Strong cash position ($41.4M in bank accounts). However, concentration in a few accounts/currencies may pose FX risk.
Negative net income suggests recent losses; consistent losses may eventually erode equity.
Large inventory holding — potential risk if demand falls or obsolescence risk increases.
Erroneous/unclear balances (e.g., negative payroll/asset, small negative advance paid) — internal controls on account classification may need strengthening.
Translation adjustment — substantial at -$3.14M, could impact equity volatility if currency swings continue.
Accounts Receivable: $5.52M — significant but appears manageable vs Payables.
No major concentrations in payables or customer/vendor transactions flagged, but further detail may help assess credit risk.

Actionable Insights

Investigate and correct negative balances classified under assets (particularly Payroll, and US2 account).
Consider monitoring and possibly reducing inventory levels; explore inventory turnover improvement.
Review and address source of net operating loss to arrest negative profitability.
Continue prudent management of liquidity, but consider diversifying cash to optimize yield and minimize currency risk.
Monitor and, if possible, limit impact of translation adjustments through currency hedging or structural changes.
Expand analysis to aging of receivables and payables for more granular credit risk assessment.