Market Sensitive Notice, page-172

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plough

33,236 Posts.

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29/03/16

07:19

Post #: 17370341
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Originally posted by makattack ↑

He/she has in all probability have not kept up with things as closely as we present holders have - and, that is exactly the point I make - that unless we 'know' WHY the COGS is up and will be much lower later -------one can only get a wrong impression.

That's the thing though. You don't need to know a company's position intimately to know that COGS will typically always be much higher in early commercialisation stage. It's just blatantly obvious. All it tells me about a person who bangs on about this is that they don't have any real idea about the business development cycle and particularly the early stages of transforming into a profitable business.

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Agree with you makattack COGS is always higher in early commercialisation stage ,and is a red herring and not a relevant KPI .
It is the speed of ramp up in sales from a baseline and the average profit margin on units sold over that time that determines the companies value on an NPV basis not the possible profit in the first few years which has virtually no effect on NPV despite being early income (not discounted for time)
On a second note, the first computers Steve Jobs made had very little impact on the NPV of Apple at that stage , but the IP even at that early stage was the formula for success, same here .

AJX Price at posting: 67.5¢ Sentiment: Hold Disclosure: Held
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