The business has changed materially since the FY 2025 baseline. Revenue inflected sharply upward in June 2026 — the last three months ran at roughly 2.3 times the prior monthly rate, and year-to-date revenue of $7.35 million already exceeds all of FY 2025 ($6.46 million), up 86.7 percent against the same period last year. Two cautions temper this result: reported gross margins for June–August (58–69 percent) are inflated by large credit entries in finished-goods costing accounts and should not be accepted as economic margin; and days sales outstanding has deteriorated each quarter, from 65 days at the baseline to 117 days at July 2026. The working-capital findings of the FY 2025 report remain open and have grown in magnitude.
Monthly revenue held a $540–620 thousand band from January 2025 through May 2026, then stepped to $1.35 million (June), $1.41 million (July), and $1.67 million (August, partial month through the 16th). The June–July pace annualizes to approximately $16.6 million — 2.6 times FY 2025. Growth of this magnitude and abruptness typically reflects a discrete event (major account win, channel addition, acquisition, or new intercompany flow) rather than organic drift; identifying the driver is a priority question for management, and the answer determines whether industry benchmarks for a $6M company or a $16M company are the relevant comparison set going forward.
Reported gross margin for June, July, and August 2026 (58.2, 68.8, and 57.9 percent) is not credible as economic margin for a food business. The cost-of-sales section for these months contains large credit balances: account 5070 COGS – Finished Goods carries −$225,396 year-to-date (concentrated in June and July), and 5024 Unbuild Variance carries −$15,500. These credits reduce recorded cost of sales and mechanically inflate margin.
| Measure | FY 2025 baseline | YTD 2026 reported | YTD 2026 indicative-adjusted¹ | Industry norm |
|---|---|---|---|---|
| Gross margin | 37.5% | 51.9% | ≈48.6% | 25–30% processors; 35–45% branded |
| Net margin | 13.0% | 31.7% | ≈28% | 2–6% |
¹ Indicative only: adds back the $225K finished-goods and $15.5K unbuild credits to cost of sales. A proper adjustment requires transaction-level costing review.
This edition adopts a trailing-twelve-month basis for turnover metrics (period-end balances against TTM flows), which will be held constant in future editions. The trend is adverse on receivables: DSO has lengthened every quarter since the baseline. The cash conversion cycle appears to improve modestly (132 → 118 days), but this is achieved entirely by extending payables to 165 days — the operating assets themselves (inventory plus receivables, 283 days combined) have worsened from 222 days at baseline.
| Metric (TTM basis) | Dec 2025 (baseline) | Mar 2026 | Jun 2026 | Jul 2026 | Norm | Trend |
|---|---|---|---|---|---|---|
| TTM revenue | $6.46M | $6.68M | $7.92M | $8.70M | — | Rising |
| Inventory turns | 2.3× | 2.6× | 2.5× | 2.2× | 6–12× | No progress |
| Days inventory on hand | 157 | 139 | 145 | 166 | 30–60 | Worsening |
| Days sales outstanding | 65 | 80 | 108 | 117 | 20–40 | Worsening each quarter |
| Days payables outstanding | 90 | 111 | 138 | 165 | 30–45 | Extreme vendor stretch |
| Cash conversion cycle | 132 | 108 | 114 | 118 | 15–45 | Flattered by DPO |
| Current ratio | 3.27 | 2.75 | 2.44 | 2.46 | 1.2–2.0 | Normalizing downward |
| Debt | $0 | $0 | $10K | $10K | — | First LOC draw (2410) |
Each edition tracks the disposition of previously issued recommendations. All three carried items originate from the FY 2025 Benchmark Analysis of August 16, 2026.
| Recommendation (origin) | Status | Evidence this edition |
|---|---|---|
| Resolve $1.76M unattributed receivables (FY25 report, item 01) | OPEN — WORSENING | Trade receivables grew $1.16M → $2.79M (Dec → Jul); >90-day bucket $1.31M; DSO 65 → 117 days. |
| Inventory aging and obsolescence review (FY25 report, item 02) | OPEN — WORSENING | Inventory $1.73M → $2.15M; DIO 157 → 166 days despite higher sales volume. |
| Investigate gross-margin dispersion (FY25 report, item 06) | OPEN — ELEVATED | Dispersion widened to 34.5–68.8%; −$225K of finished-goods costing credits in Jun–Jul require review (§03). |
| # | Recommendation | Rationale |
|---|---|---|
| 04 | Identify the June 2026 revenue driver. Determine whether the 2.3× step-change is a customer win, channel, acquisition, or intercompany artifact, and re-baseline plans accordingly. | Governs which benchmark peer set applies; affects credit, inventory, and staffing decisions. |
| 05 | Costing review of accounts 5070 / 5024. Explain the −$225K finished-goods and −$15.5K unbuild credits before relying on 2026 margins. | Reported margins are not currently decision-grade (§03). |
| 06 | Scale collections with the revenue step-change. At a $16M run-rate, each day of DSO ≈ $45K of cash; the 52-day deterioration since baseline is ≈$2.3M of working capital at current volume. | DSO worsening is compounding with growth (§04). |
| Report | ID | Runs this edition |
|---|---|---|
| Income Statement | -200 | FY 2025 monthly (LFY, range=acctmonth); FY 2026 YTD monthly and totals (TFYTP); quarterly columns (range=acctqtr) |
| Balance Sheet | -202 | End of Dec 2025 (LFY); custom period-ends Mar 2026 (id 209), Jun 2026 (id 213), Jul 2026 (id 215) |
| A/R Aging Summary | 274 | As of Aug 16, 2026 (baseline edition) |
Working-capital ratios use trailing-twelve-month revenue and cost of sales against period-end balances — adopted this edition as the standing convention (the FY 2025 baseline used fiscal-year flows; both are shown in the history file). August 2026 is excluded from trend snapshots because the month is incomplete. Industry norms are unchanged from the baseline report (mid-market F&B composites; approximate). The quarter-end net-income figures embedded in each balance sheet ($111.8K Q1; $829.8K H1) were cross-checked against the income-statement quarterly columns and agree.
This series maintains a machine-readable metric history in the NetSuite file cabinet: benchmark_tracking_history.json (file id 26303, /SuiteScripts). Each edition appends its snapshot rows, findings, and recommendation dispositions. Future editions read this file to compute period-over-period deltas and to cite prior findings by identifier (e.g., E1-F2 for the costing anomaly), ensuring the narrative is cumulative and auditable rather than regenerated from scratch.