Free cash flow has turned negative, reaching an outflow of $780,000 in 2024Q4, highlighting the firm's struggle to fund operations through core trading activities.
| Cash from Operations | -777K | 1.81M | -1.95M | 3.21M | 2.94M |
| Operating CF Margin % | -0.59% | 0.95% | -0.94% | 1.66% | 2.24% |
| Operating CF Growth % | -142.95% | 192.96% | -160.53% | 9.21% | - |
| Net Income | -3.53M | 1.09M | 4.62M | 4.7M | 456K |
| Depreciation & Amortization | 96K | 62K | 58K | 40.18K | 50K |
| Stock-Based Compensation | 0 | 0 | 0 | 0 | 0 |
| Deferred Taxes | 0 | 0 | 0 | 0 | 0 |
| Other Non-Cash Items | 17K | 540K | 195K | -380.18K | 360K |
| Working Capital Changes | 2.64M | 121K | -6.81M | -1.15M | 2.08M |
| Change in Receivables | 9.4M | -8.05M | 4.57M | -11.22M | 568K |
| Change in Inventory | 218K | 1.21M | -2.08M | 241K | -224K |
| Change in Payables | -6.22M | 6.14M | -8.73M | 10.43M | 1.9M |
| Cash from Investing | -5K | -208K | 42K | 42K | -2K |
| Capital Expenditures | -5K | -296K | -14K | -11K | -3K |
| CapEx % of Revenue | 0% | 0.16% | 0.01% | 0.01% | 0% |
| Acquisitions | 0 | 0 | 0 | 0 | 0 |
| Investments | - | - | - | - | - |
| Other Investing | 0 | 88K | 56K | 53K | 1K |
| Cash from Financing | 130K | -2.81M | -2.64M | -2.03M | 1.67M |
| Debt Issued (Net) | -237K | -25K | 311.1K | -1.82M | 1.78M |
| Equity Issued (Net) | 0 | 1000K | 0 | 0 | 0 |
| Dividends Paid | 0 | 0 | -2.18M | 0 | 0 |
| Share Repurchases | 0 | 0 | 0 | 0 | 0 |
| Other Financing | 367K | -5.94M | -777.87K | -205K | -104K |
| Net Change in Cash | -652K | -1.21M | -4.55M | 1.23M | 4.61M |
| Free Cash Flow | -782K | 1.51M | -1.96M | 3.2M | 2.94M |
| FCF Margin % | -0.59% | 0.79% | -0.95% | 1.65% | 2.23% |
| FCF Growth % | -151.69% | 177.19% | -161.17% | 8.94% | - |
| FCF per Share | -0.03 | 0.06 | -0.08 | 0.13 | 0.12 |
| FCF Conversion (FCF/Net Income) | 0.22x | 1.67x | -0.42x | 0.68x | 6.46x |
| Interest Paid | 0 | 0 | 0 | 0 | 0 |
| Taxes Paid | 856K | 791K | 499K | 0 | 32K |
Severe liquidity and solvency
As reported in recent financial statements, DTCK exhibits a persistent disconnect between net income and operating cash flow, with the OCF/NI ratio fluctuating wildly, including a 0.21 reading in 2024Q4, which suggests that reported earnings are failing to translate into meaningful cash generation for the firm.
The extreme volatility in the OCF/NI ratio indicates that accruals and working capital swings are dominating the cash flow profile rather than core operational profitability. Investors should monitor this divergence closely, as it suggests that the company's accounting earnings may not be reflective of its actual ability to sustain operations through internal cash generation.
Based on the provided quarterly data, DTCK's free cash flow trajectory has turned increasingly negative, culminating in a -$780,000 outflow in 2024Q4, which highlights the company's inability to fund its operations and minimal capital requirements through its core trading activities during this period of revenue contraction.
The consistent inability to generate positive free cash flow, even with negligible capital expenditure, points to a structural issue where operating losses are consuming the company's limited liquidity. This trend appears to be accelerating, which warrants further investigation into the firm's ability to maintain its current business model without external capital support.
According to the cash flow statements, working capital changes have become the primary driver of cash flow volatility, with a $2.5 million swing in 2024Q4 alone, indicating that the company's reliance on trade credit and inventory management is creating significant, unpredictable pressure on its limited cash reserves.
The erratic nature of these working capital movements suggests that DTCK is struggling to manage its cash conversion cycle effectively in a declining revenue environment. This instability may indicate that the company is forced to prioritize liquidity management over operational efficiency, potentially leading to further strain on its already thin cash position.
Analysis of the historical data reveals a widening gap between cumulative net income and operating cash flow, suggesting that the company's reported profitability over the last several years has not been supported by a corresponding accumulation of cash, which raises concerns regarding the sustainability of its business model.
The persistent failure of operating cash flow to track with net income over multiple periods suggests that the company's earnings may be heavily reliant on non-cash items or aggressive revenue recognition practices. This divergence appears to be a structural feature of the firm's operations, which may indicate that the underlying business is less profitable than the headline figures suggest.
Quick answers to the most common questions about buying DTCK stock.
Davis Commodities Limited Ordinary Shares (DTCK) generated $-0.8M in net cash from operating activities in 2024. This reflects the cash generated directly from core business operations.
Davis Commodities Limited Ordinary Shares (DTCK) reported negative free cash flow of $0.8M in 2024, indicating capital requirements exceeded cash from operations.
Davis Commodities Limited Ordinary Shares (DTCK) spent $0.0M on capital expenditures in 2024. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.