jim
going forward it becomes more important to either understand technical analysis or fundamental analysis, or both. you have to dig deeper than what the numbers are telling you up front. you have to ask yourself how they come up with that number. the book value on yahoo matches what zack's has also. i believe them both to be incorrect. in the case of book value, the formula is total assets minus total liabilities. i have seen and used other formulas. a second is total assets minus total liabilities, intangible assets and preferred stock. this is the method i used to calculate the value for zran's book value. in general, you can think of intangible assets as a "slush" acct. zran probably overpaid for an acquisition or something of that nature so they plug the difference to the intangible account. imtangibles are not "real,physical" assets. this is why i feel they do not belong in part of the book value calculation. many, many co's out there have bloated intangible accounts right now. jdsu is the biggest example and that is why they are taking such monstrous losses. another one to study the effect of bv/intangibles is arba, as they too write down their assets. but as i sed, there are many co's out there in this situation. so much so, i believe the sec has requested all co's to re-assess their assets by january.
instead of looking at the cash on hand, which it appears zran's was done by stock issuance, it will become imperative especially for investor types to find out what a cash flow statement is and how to intrepret it. the importance of the cash flow statement can't be stressed enough. it will tell you where a company gets its loot from. when reading one, in most cases, you want to see positive cash flow from operations, not from investments or from financing. zack's cash flow statement format is pretty shoddy. in this regard if anyone can find a site that breaks it down into quarterly's i'd appreciate a link. this stmt will tell you alot about a company's business model. in general, if cash from operations does not sustain a company, they will eventually run into problems until that changes. what's occurring with zran is unclear to me and would take much more digging to assess whats going on there currently. the annual isn't helping me much either, but i believe the losses are being generated by markdowns in the intangible account. this can be seen in the shifts from the depr acct and the intangibles on both the income and balance sheets. from the qtrly balance sheets, i haven't been able to determine where their cash is going yet, but it has decreased by 50pct in 2 qtrs. your value of cash appears correct. since the liability side of the balance sheet is pretty clean, i'm a bit stumped where the burn is occurring. ahh, seems its being shifted into an investment and advance acct, which has picked up the difference. so that would be something that would have to be looked into in the filings as to how they are putting that cash to work or what.
in general, large changes in accounts that start with "other" as well are flags to immediately dig deeper into the 10-q's and 10-k to find out what kind of "juggling" is going on. this is the case in their cash flow statement. large activity to "other operating activities".
of late, i rely more on technical analysis than fundamental.oftentimes, the chart seems to tell you in advance of the news or fundamentals that things may be changing. also, to do a thorough fundamental read can take me several hours if the numbers look muddy and require qtrly by qtrly analysis of financials to dig up results. i've flagged a few things here if you'd like to delve into the quarterly's to further assess your questions
milesov |
