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Hi Norm,

 

Well it was just some quick maths at 4am in the morning LOL.

 

I took the 1st quarter results and basically times them by 4 quarters.

 

Take into account though that I expect them to MOST likely have a better quarter this quarter than the 1st as they had the Verizon Acquisition LIVE and producing revenue's, the $560k from WorldxChange which went straight to the bottom line etc etc.

 

They have plenty of tax credits up their sleave as well so I dont see them paying tax for a while due to their past losses.

 

Just some quick maths mate - not the be all and all BUT definately possible I believe.

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In reply to: bullish on Wednesday 26/01/05 02:29pm

Hi Bullish,

 

I take it you are using the 1st quarter report of net positive cash flow of $964K. Multiplied by 4 gives about $4m. If only it was that simple.

 

They are reporting cash flow, not profit. It is possible to have positive cash flow, but be making a loss. Typically when a company reports cash flow, with no mention of profitability, this is the case (ie they are running at a loss). I suspect this is the case with ETC.

 

Don't know how your accounting knowledge stands, so forgive me if I am telling you how to suck eggs. Cash flow and profit measure different things and at different times. Examples:

 

Capital expense (new equipment purchased). The cash flow (out) is booked in full when payment is made for the equipment. The expense (which of course flows through and reduces profit) is booked to the depreciation account over subsequent periods (can be 3 to 10 years depending on the expected life of the equipment).

 

Sales are booked to revenue when they are made. If a company sells $1m worth of widgets this month, $1m is booked to revenue for the period. This flows through and increases profit. This is the case even if no payment has been received. The $1m is booked to the debtors account and apperars in the balance sheet as an asset (receivable). The payment may be (and often is) received in a different accounting period.

 

Expenses (goods or services purchased) are booked as an expense in the period they are received, even if they have not been paid for. This flows through and reduces profit. They are booked to the creditors account and appear in the balance sheet as a liability (payable). The payment may be (and often is) made in a different accounting period.

 

These are just three examples. There are heaps. As you can see cash flow and profit are entirely different things and are measured over different times.

 

Notwithstanding this, positive cash flow is very important. It is just that on its own, particularly over a relatively short period, it tells you nothing about profitability.

 

Bullish, if you understood all this before, sorry for wasting you time. If you didn't, hope I've helped.

 

Back to ETC. The positive cash flow last quarter was good. If it is repeated this quarter, even better. What we want to see however is information on their revenue and costs, and hence profit (or loss). If they can show us a profit and sustain it for a couple of quarters, then I agree, the shares are ready for take off. In the meantime they are at the risky end of speculative.

 

But I've got some and don't mind. It's fun and it might just pay off.

 

 

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Hi Norm,

 

Thanks for the explanation.....I knew a LITTLE about how it all worked but certainly know a lot more now thanks to your reply!

 

Well I guess it will be good to see the 2nd quarter to see where they are now in terms of continuence of positive cashflow etc.

 

Cheers and bring on the announcement.

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In reply to: bullish on Wednesday 26/01/05 11:16pm

NORMC/BULL Your right on the money with your explanation.....iN MY VIEW THE MOST IMPORTANT STATEMENT IS THE "CASHFLOW STATEMENT" as this shows the revenue v NPAT (net profit after tax )...basically where the money has come from and where it ended up...in other words...COGS(cost of goods sold ) the customer reciepts and reported profit.....lets hope its a good one .....cheers Jam

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In reply to: jamiroquai on Thursday 27/01/05 07:17am

From a technical view...the charts show a possible change in direction....directional indicators D+ has broken back above D- .. suggest that the SP is trying to change direction and needs confirmation to signal a buy....basically the SP needs to get above 1.4c to signal a buy....lets see what happens....pre market it looks like the bids have increased and there is now over 3.6 million on the buy and 500 k on the buy at 1.4c ...could open at 1.4 which is a good sign.... needs to close strong today...Go you good thing....lol

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In reply to: jamiroquai on Thursday 27/01/05 08:24am

From a technical view it still looks like a dogs breakfast http://www.ShareScene.com/html/emoticons/weirdsmiley.gif , would need to start breaking some serious resistance on big volume to stir any interest,.... for every indicator you use to give a buy signal, you can find another 5 that say no.

As far as market depth goes it is at best another unreliable indicator, most oif the serious traders are waiting in the wings(not sitting in the que) with their buy or sell order ready if and when certain levels are hit.

Will have to have very good news to lift it.

 

The fact that Anne said she has a few indicates their may be something in it, but pulease you guys, the 10 post a day waffle with all the same information and bullish comments,......if it is going to rise your comments will not talk it up.

 

Cheers

 

P.S Sorry lads and lasses I know I have said it all before, but I just think of those newer to the market that could get well and truely toasted.

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Hi BSA,

 

Thanks for your comments again.

 

MOST of the info we have portrayed on here has been FACT backed up by asx announcements and info which can easily be verified......So I thank you for trying to stop newbies perhaps being roasted as you LOL but I dont think it is going to happen. Perhaps you'd be better placed making that comment on the RRS, ADY, PNO et al thread BUT I doubt it that it stands here because ETC is a QUALITY TURNAROUND stock for the many FACTUAL reasons pin-pointed before.

 

If ANYTHING, I honestly believe newbies who have chosen ETC will be VERY happy soon.

 

Cheers

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QUOTE (bullish @ Thursday 27/01/05 10:37am)

Yes but most of the same info is portrayed day in day out, to keep the thread alive,.....but dont mind me carry on regardless http://www.ShareScene.com/html/emoticons/tongue.gif

 

As mentioned before I hope you guys are right and it pops its cork, but for those newer to the market stocks in uptrends are safer, as momentum is going with you.

 

Cheers

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'The trend is your friend' NO DOUBT.

 

HOWEVER, as both being experienced traders/investors THERE IS such a thing also called 'PICKING THE BOTTOM' which also can be VERY REWARDING as well.

 

This my friend...........IS THE BOTTOM for now if you ask me.

 

Just watch and see BSA - she's gonna go up nicely LOL!!!

 

Cheers

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