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Technology Stocks : VALENCE TECHNOLOGY (VLNC) -- Ignore unavailable to you. Want to Upgrade?

To: Gordon Quickstad who wrote (12901)	7/7/1999 12:07:00 PM
From: Rich Wolf	Respond to of 27311

Hi Gordon, wouldn't that be nice? Except that Barry is in Dublin, and Mallusk is waaaay up there in Northern Ireland. ;-) To paraphrase what a Brit once told me: " To an American, a hundred years is a long time; to an Irishman, a hundred miles is a long distance."

To: Gordon Quickstad who wrote (12901)	7/7/1999 5:32:00 PM
From: Barrydub	Read Replies (1) \| Respond to of 27311

I am afraid Rich is right Gordon. I have not travelled North of the border for over three years and our national press hardly covers any Northern news, apart from the endless political situation. Be assured that if I do get any 'local' knowledge I will pass it on to this board. Back to the subject of cash flow and profit. It is certainly possible to be 'in the black' cash flow wise and still be incurring losses, particularly in a situation where start-up capital equipment and raw materials have been paid for prior to getting revenue from sales. The following figures are totally fictional, and are definitely not intended to represent anything that is going on in Valence; Example: Capital equipment purchased for $900,000 (and already paid for) Depreciation on equipment is 40% p.a. Raw Material stocks are $500,000 at 1/1/99 and $400,000 at 31/3/99 Raw materials purchased during the quarter $200,000 Operating Expenses for quarter $150,000 Additional equipment purchased and paid for during quarter $100,000 Assumes creditors and debtors remain the same at beginning and end of period Cash Flow: Sales $500,000 Raw materials - new purchases ($200,000) Operating expenses ($150,000) New equipment ($50,000) Therefore cash surplus for quarter = $100,000 Profit and Loss for the same period: Sales $500,000 Purchases ($300,000) - being $500k + $200k - #400k Operating expenses ($150,000) Depreciation ($100,000) - being 40% x ($900k + #100k) for 3 months Therefore loss for quarter ($50,000) I know that this example is too simplistic. My only point is to show that it is possible to be 'in the black' for cash flow before being 'in the black' for profit. Barry