back of the envelope valuation.

Obviously when shareholders purchase shares they have a rough figure in mind about what price to buy and should have a figure in mind about what price to sell.

My question is has anyone else done a back of the envelope valuation?

Here's mine.

Assuming today's max production figures are somewhere between 5,000 and 10,000 per day.

If they are looking to ramp up production because of demand, and as some posters are stating they have back orders of around 300,000, then it would seem obvious to me to meet future demand then they would need a capacity of around say 100,000 units per day?

Multiply this figure by 360 days and it equals 36mil with a retail of say AUD$10.

If they were sold then the net profit,conservatively, AUD$2x$36 mil equas $72 mil times PE of about 15 equals market cap of about AUD$1bil.

Divide $1 billion by the current market cap of say $20 mil equals 50.

Mutiply 50x5c and I get AUD$2.50

I know it is all speculation, but surely someone else has done some back of the envelope caluculations. Is it unrealistic to expect to sell 100,000 units a day world wide?, Is a PE of 15 too high? is a net profit of $2 too high?

Phil Thomas MD of ADY did this type of calculation for his Shareholders and came up with ADY $1.25 from memory and this was when ADY was trading at 12c

He is half way there.

cheers
Discussion Welcome.