Its a seriously flawed concept using ratios. The charts are not useful in the slightest. I could show you countless companies that have gone to the wall with those kind of trajectories. Any company that has gone from no income to making revenue will show you the same graph. Using some straight line with bias doesn't convince me in the slightest. The punters sure loved it though. If you cared to notice the last quarter turned negative to your biased trend. As soon as you make a dollar in revenue the ratio improves.
The only thing that matters is the bottom line, not ratios, not cash receipts and certainly not revenue.
Can I ask a question, was AJX in a better financial position in 2011 when it lost $3m or in 2016 when it lost $15.4? The answer is simple to me, however obviously not in these parts.
Lets put this in simple terms, lets say you own this company. Its been running for 8 years, yes 8 years and never turned a cent in profit. Your partner question you in 2011.. "how much have we made this year honey?" Well, we lost $3m......
Fast forward to 2014....again"How much have we made this year honey?" Um...we lost $4m
Now 2015..."How much have we lost this year?" .....$11.8... "What the hell is going on!!!" ...revenue is building darling.
2016...."You better tell me some good news, we have poured $55m into this thing.".......darling revenue is going through the roof and you see the ratios and these graphs I've put together......"tell me how much"
.....we lost $15.4m ......"@#%$"
Show any accountant in the world these books and they will look at you like you're a madman and will know its not a private company. It may be a surprise to some of you but most successful companies are built ground up, they make profit from the start and expand as necessary.
AJX needed a capital raising but they knew shareholders would be seething so they got a "great" loan in the low interest environment.
Bottom line gentlemen, bottom line.
