Weighted Average Metrics for Income Statement and Balance Sheet formoney losing companies to determi

REVENUE________ 1.00000000
COGS_EXPENSE___ 0.73653587
GROSS_PROFIT___ 0.26346413
EBITDA_EXPENSE_ 0.96698689
EBITDA_________ 0.03301311
EBIT_EXPENSE___ 1.08160911
EBIT___________ -0.08160911
TOTAL_COSTS____ 1.10018924
NET_PROFIT_____ -0.10018924


Since these companies don't pay taxes, their total interest payments
are only 1.84% of revenues. Therefore, a financially distressed
company is mostly caused, not by high interest payments, but by very
high fixed costs, such as COGS and S&M/Marketing/R&D.

 

Re: Weighted Average Metrics for Income Statement and Balance Sheet for money losing companies to determine interest payments by tangent1.57

2.7182818284590... wrote:

> REVENUE________ 1.00000000
> COGS_EXPENSE___ 0.73653587
> GROSS_PROFIT___ 0.26346413
> EBITDA_EXPENSE_ 0.96698689
> EBITDA_________ 0.03301311
> EBIT_EXPENSE___ 1.08160911
> EBIT___________ -0.08160911
> TOTAL_COSTS____ 1.10018924
> NET_PROFIT_____ -0.10018924

> Since these companies don't pay taxes,

They do actually, just not income taxes.

> their total interest payments are only 1.84% of revenues.
> Therefore, a financially distressed company is mostly
> caused, not by high interest payments, but by very high
> fixed costs, such as COGS and S&M/Marketing/R&D.

That utterly mangles the real story.

They mostly go broke because not enough are buying what they are selling.

You only get very high fixed costs when they arent selling much.

 

Re: Weighted Average Metrics for Income Statement and Balance Sheetfor money losing companies to determine interest payments by tangent1.57

On Apr 6, 3:52 pm, "Rod Speed" <> wrote:
> 2.7182818284590... wrote:
> > REVENUE________ 1.00000000
> > COGS_EXPENSE___ 0.73653587
> > GROSS_PROFIT___ 0.26346413
> > EBITDA_EXPENSE_ 0.96698689
> > EBITDA_________ 0.03301311
> > EBIT_EXPENSE___ 1.08160911
> > EBIT___________ -0.08160911
> > TOTAL_COSTS____ 1.10018924
> > NET_PROFIT_____ -0.10018924
> > Since these companies don't pay taxes,
>
> They do actually, just not income taxes.
>
> > their total interest payments are only 1.84% of revenues.
> > Therefore, a financially distressed company is mostly
> > caused, not by high interest payments, but by very high
> > fixed costs, such as COGS and S&M/Marketing/R&D.
>
> That utterly mangles the real story.
>
> They mostly go broke because not enough are buying what they are selling.
>
> You only get very high fixed costs when they arent selling much.

I agree with your opinion as well. Keep in mind, if the revenues
increased, than the debt/revenues would DECREASE. It wouild be less
than 1.84% of revenues.

 

can you help me?

I have this situation:

Clients: 167080

Services:147812

The gross profit: 167080-147812= 19268

Administrative Expenses : 10143

The net Profit is 9125

The Corporation tax is 1825

The debtors and the creditors are 0 because what was paid also was cashed.


i Have some difiiculties completing the Trial balance