npat & valuation, page-59

Hi Gdelaney

Your logic is wrong mate. Price erosions and operating costs (cost of goods, manufacturing, distribution, sales, etc) are two different things and are calculated separately. If you look at the spreadsheet above you will see a line for price discount.

Calculations are done in the following order...

Fondas market cap is price x volume.
Fondas operating profit is revenue less operating costs (DRLs costs)
ACLs revenue is 50% of fondas operating profit

The spreadsheet above and all my calculations include price discounds as indicated.