haha.. That's good. I was seriously starting to think: "OK who have I told that I'm Saltpeppersquid on Hotcopper and is being a d***". PHEW
I was going to buy and still am thinking about it
But yeah, maybe after I do my own research.
I'm here because my friend told me to watch for this stock but I didn't have time at the moment to dissect the financials so I thought I'd see if someone on Hotcopper had already done it, and as we all know, the stock market doesn't wait for people who need time to do research.
It just doesn't sound right that a company like GXY would account for their revenue and expenses on a cash basis, in fact, it's wrong to do so (hence why we have accrual accounting). It doesn't give an accurate picture, as we all know, of the actual activity of the company in the period we're reporting for.
The gross margin is what it is, I am pretty sure that no FY17 revenue was recognised in FY16.
You can't prepare financial statements (unless you're a mum and dad fish and chip shop accounting on a cash basis) where your revenue or expenses relate to a period that isn't the one you're reporting for. I am certain that Galaxy's accountants know this and wouldn't have done it this way (hence why they've got prepayments on their balance sheet (it's evidence that they're accounting on an accruals basis).
Interestingly however, Vocus recently got into abit of a pickle for recognising revenue for work that was not actually performed yet... I am still amazed that the accountants there could have done such a thing and that no shareholders have taken action on them misleading everyone with their inflated revenue numbers.
