RE:ANOTHER DAY WITH MORE CONFUSING POSTSMelida wrote: -As it relates to Pyro, "book value," at the present time, is a useless balance sheet item I ignore it. Interestingly, book value was an important item a few years ago in relation to Equitable Finance. A Canadian company that trades on the TSE. It ran into difficulties. Won't get into the details. The stock price got to a low point where it was trading at less than book value. And book vaule for this company was an important metric due to the nature of its business and assets. Essentially, book value told me that Equitable was trading at below it's asset sale value. Equitable basically just holds a whole bunch of mortages so if it was going under there would be a sale of all these mortgages. What the balance sheet told me was that even in this worst case scenario, this sale of all the mortgages would provide more than enough money to pay all liabilites with money left over to pay all shareholders an amount that would be more than what the stock was trading for. So, basically NO risk to the downside. Ask Warren Buffett. He bailed out Equitable Finance and made a killing. I'm proud to say I did well on my investment. The point here, as it relates to Pyro, is that due to the nature of it's assets book value is really low BUT does not tell the whole story. It doesn't come close. Book value does not include assets that are created/developed by the company. In Pyro's case the value of the company is based on Plasma torches and patents, non of which have been purchased by Pyro. It's all been developed by Pyro.
New point: As was outlined earier today by another poster, cash flow, receivables, potential... are what is important to Pyro. The poster indicated that Pyro was brutal with its management of receivables (read the post). There's no question that the big receivable that is slow being received has caused problems. Lots of problems. However, it is my understanding that Pyro is working through this problem. The situation is far from dire. And it always helps to get two big payments this week (total of almost $1,000,000.00). Pyro has indiacted (year end comments) that is has the cash to carry on business as a going concern.
Some posters are pointing to Pyro's losses as outlined in their financials as being something they have to somehow repay. This is not the case. In fact, these accountant losses can be carried forward to future years and used to offset future revenue. Therefore No tax to pay. What these posters need to understand is that Pyro has very little actual debt that actually has to be paid off. This, to me, is amazing given the very lengthy process Pyro has needed to develop the plasma torches.
There's a lot more to say. But I've done enough for this week.
As usual EXCELLENT post Melida. Really puts things into context and extraordinary clarification.