FAMH replies to questions, and the accounting methods they use, are beginning to fascinate me.
Capt. Dan, I greatly appreciate you asking Ira where the magical 3rd quarter earnings came from. He needs to answer the tough questions. You listed the exchange as:
<<<3 Can you explain how a company can do 1.7million and end up with 1.3in profit? IT IS NOT PROFIT. IT IS NET INCOME, CASH, RAISED FROM 504 SALE ETC..>>>>
According to Cheryl's description of the 504 sale (the very informative Post#35), the company raised $1 million from it.
That means, third quarter earnings would be $1.3 million minus that $1 million, or a total of $300,000 from operations. How many cents per share is that?
Doesn't anyone feel the least bit deceived?
Could anyone tell me how much FAMH raised in their initial public offering in May, so that I could subtract that from the earnings they stated for the first half?
Does the company plan to sell stock each quarter to keep these "earnings" up? If a 504 sale accounted for 80 percent of the earnings stated in their 3rd Q press release... wouldn't it be customary to at least mention it?
If I had not pressed this question... when would Ira have mentioned it to anyone? When the audited financials came out?
Net income figures for the first half of 1997 were stated as $1,265,854.14, but how much of that is from stock sales through the initial public offering?
Someone who works in accounting, perhaps, could answer this one: is it normal to count stock sales as earnings? On the flip side, if the company bought its stock, would that then be considered a loss? I'm confused.
What other surprises are out there? |
