Ann: Xped Complete Jemsoft Acquisition, page-30

@Sammy_tic while I can't give you the technical IoT product analysis of @JDragon (props for the post). I can explain to you why JCT appears to be breaking even in the 1HFY17 and it is false illusion I am afraid to say.

All good FA's understand that when business undergoes the production of inventory you can bend some accounting rules and capitalise what would be traditional fixed costs of the business and store them on the balance sheet under inventory. The result of which makes the P&L of the business building up inventory look much more profitable than it really is.

Unfortunately, we know the two key facts about JCT from the quarterly cash flows:
1. They built up a lot of inventory (approx. $1m) during that period; and
2. They haven't announced increasing sales levels, and only as of a fortnight ago starting hiring operations managers. Ref: https://www.seek.com.au/jct-healthcare-jobs/in-Myponga-SA-5202/full-time

Shock horror? or not really? If you are interested in learning about what I mentioned - a bit of info here: https://www.oldschoolvalue.com/blog/valuation-methods/misuse-expensing-capitalizing-cost/



Have a good day.

RR