Ann: Market Guidance, page-75

I'm not here to talk down SHJ (far from it since it's against my interests) but i understand the point Disagree is making and it is not related to inflation - at least not entirely.
Also don't mean to tell anyone to suck eggs but the point seems to have been missed.


See Discounted cash flow valuation which relates to valuing future cashflow of a business while factoring in the time value of money:
http://www.investopedia.com/terms/d/dcf.asp

The future cashflow of a company is compared to the "risk free rate" generally the current bond rate and discounted backwards to present date. Essentially it's a principal similar to "a bird in the hand is worth more than two in the bush." Sorry that's a bit of a ham fisted description but the link explains it.

What makes what Disagree said interesting is that DCF is generally performed by projecting future earnings from historic earnings.... but in this case (and SGH as well) the WIP earnings are also future earnings - not present day earnings. It warrants thought into how (or if) this would impact a DCF valuation of these companies.