RE:RE:RE:Sales Questionslscfa wrote: Q4 cos was 21,294....Q4 gross revenue was 449,686 or 21.12 x cos .....Q4 net revenue was 47,663 or 2.24 x cos.....it is hard to believe that a co. can markup its cos by 21x in a competitive environment...I think net sales is closer to reality
The accounting standards allow for rebates to be netted off to come up with a net sales number so NO a small cost of sales did not generate a large gross sales number in reality. Its just accounting fudges. Q4 Cost of Sales (per page 8 of MD&A) was $12,757 giving a GM% on net sales of 73%. Inventory used to generate $449k of gross sales was about $95k giving a GM% of ~78% (excl.CMI's) so same ball park.
It all depends whether you think customer marketing incentives will continue to run at 90% (like that halfwit Ivey) of sales or whether after some initial upfront payments to secure business they will fall back to a more reasonable number.
I think they will fall back significantly (30%-50%??) on a per customer basis (depending on whether its independents or chains) but they will always be present because the business will always be winning and looking to retain business. Irrespective at this early stage I think some of the other posters are right , Gross sales, sales teams and product portfolio are the right metrics to focus on.