GREY:XEBEQ - Post by User
Comment by
kulewateron Oct 28, 2021 3:14pm
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Post# 34060297
RE:RE:RE:RE:RE:RE:RE:RE:RE:Margins
RE:RE:RE:RE:RE:RE:RE:RE:RE:Margins It doesnt affect overall product margins but does affect Q operating margins.
gwalker wrote: Accounting does not work this way.
Paying the expenses now will have no effect on the margins (they could buy the materials for the next 3 years and it would just go to inventory and would not effect margins)....unless XBC recognizes revenue on a percentage of completion basis which i am pretty sure they don't.
Ciao wrote: OK, you're thinking expenses taken in Q2, so now they will reap the benefits in Q3 and onward
kulewater wrote: Really depends on when they assumed the expenses.. if they committed to purchasing the raw materials in Q2 they could have already been absorbed - leaning on the margins asymetrically.
Moving forward those expenses wouldnt weigh on the bottom line in future Qs. Its a very shrewd and smart move if thats indeed what happened.. and based on what I know of Mr. Bombardier its very likely.
How does that work? It won't have a positive effect on this quarter but the next as they are taking up expenses that won't be required in subsequent quarter(s).