The Elephant in the room - SGH's future, page-250

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jimk3758

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31/08/16

14:30

Post #: 18826095
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Originally posted by denbo ↑

Hi Krispy

Business do not GROW by contracting.

I'll try and explain.

All (growing) businesses incur costs - as fast as you get rid of one expense it's replaced by with another. That's as it should be.

And that's why budgeting is needed, in an attempt to control the outflow of dosh to a sustainable level - in direct proportion to the amount of mone (profit) coming in.

So ... while I noticed a whole bunch of people on the forum praising the demise of these 'one-offs' that are presumably paid which will be added to the income next report - I'm a'thinking 'OK, so what's next?'.

What a business really wants isn't to cut it's costs - if they're not wasteful.

A business needs to increase sales - increase the dosh coming in.

All expenses, then, should be seen as an investment, not an expense. Because they help generate the dosh coming in.

A business without expenses is like a person with no tax bill at the end of the year.

So, I'm happy to see SGH spend as much as it needs to on income producing expenses - as long as money coming in increases by a bigger amount.

Seems all SGH has come up with so far is staff incentives. (Oh! and pay rises).

Maybe they'll be giving away SGH shares.

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Yes but Denbo but you and me both thought S139M for ads was wasteful. I certainly didn't think they needed to spend that much for ads.

SGH Price at posting: 43.0¢ Sentiment: Hold Disclosure: Held
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The Elephant in the room - SGH's future, page-250

Top Stories

Nimy to raise $1.21M to explore 'newsy' WA targets

Almonty locks in govt agreement for tungsten oxide plant in South Korea

Infini soars 50% as company reveals it could’ve just made uranium history – redefining what it means to be “high grade”

SKS Technologies wins US$90M award to supply power to international hyperscale data centre in Melbourne

Bitcoin investors need to know the risks

Week 28 Wrap: ASX hits all time high; CBA shares' two realities; US inflation hits 3% ahead of China plenum

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Immutep reports strong response rate from immunotherapies treating carcinomas

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