RE: News - Annual Financial Report I really am trying to make sense of the MD&A
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According to my ‘training’, from the stockholders point of view,
the most important piece of data in a corporate report is the earnings per share.
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Earnings per Share
Page 3 of MD&A
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Earnings per share, year ending 30 June 2012, loss 48 cents per share.
Earnings per share, year ending 30 June 2011, loss 06 cents per share.
We are certainly going in the wrong direction here.
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Perhaps here is a less dark spot.
Earnings per share from ‘continuing operations’ for year 2012, loss 5 cents per share.
Earnings per share from ‘continuing operations’ for year 2011, loss 5 cents per share.
From this aspect, things have not gotten any worse.
Exactly what does ‘continuing operations’ mean?
Let us have some discussion about this.
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I just read a very recent interview of our brother shareholder, Rick Rule.
The topic was Gold companies, but my ears stood up and my blood ran cold,
when I heard him use the term gobbledygook with regards to financial reports.
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He suggested:
Strip the tax gobbledygook from the accounting and look simply at cash at the beginning and end of period and capital expenditures, and you'll see how much cash these companies are generating.
So I though I would try the cookbook, I hope I got the instructions right.
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Let us simply look at cash at the beginning and end of period
Cash
Page 7 of MD&A
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Cash, 30 June 2012, $1.63 Million.
Cash, 30 June 2011, $5.52 Million
Cash is down $3.88 Million, or down 70%.
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Our burn rate has been $O.323 Million per Month.
Therefore, our $1.63 Million should last 5 months.
That is July, August, September, October, and November.
This does not seem very cool.
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Now, let us look at expenses at the beginning and end of period.
Operating Expenses
Page 4 of MD&A
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Expenses, for the year ending 30 June 2012, $6.79 Million.
Expenses, for the year ending 30 June 2011, $5.56 Million.
Expenses for this year are $1.22 Million, or 22%, more than last year.
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RJ