One can look at the just reported JCPenney Q2 results and compare them to expectations, which as "expected" missed across the board, with Revenues coming at $2.66bn below expectations of $2.78bn, EPS missing consensus of $1.07, printing at $2.16 per share, comparable store sales sliding 11.9%, a profit margin of 29.6% lower than last quarter's 30.8%, and 33.2% a year ago, and so on, but that would be ignoring the forest for the tress. The only data point that summarizes the epic, no-recovery catastrophe at the company is the cash burn. As the following tell all chart shows, the company burned a ridiculous (and record) $1.146 billion in free cash flow (Cash from Ops less CapEx) in just one quarter, Q2, and when adding the $948 billion in cash burn in Q1, JCP burned a monstrous $2.1 billion in the first six months of 2013. At this point the only question is when the bankruptcy filing comes.
Putting this another way, JCP ended Q2 with $1.5 billion in cash... after $2.18 billion in net proceeds from issuance of debt. Without the Goldman loan and other liquidity injections in the second quarter, the company would be in Chapter 11 right now, where incidentally the company's secured lenders (being long the term loan is not being bullish on the company; it is being bullish on the fulcrum security in a bankruptcy filing) want it to be post-haste. And it will be: it is Q3 when the cash burn really picks as part of the pre-holiday restocking season. In short: JCP, which is all out of unencumbered assets, has one final quarter to fix itself or it's lights out.
Oh, and for those hoping for a revenue pick up, it may come... Eventually. That is of course assuming the company has enough cash ahead of the heavy inventory build Q4 quarter.