Integrated Freight Corp (fka IFCR)

[eddy2]

Today we are going to discuss the subject of off selling.

Let's take a moment and reflect back on our studies. The company as a seperate entity from its trading interest has as example only five million dollars inventory based on actual labour and materials used not taking into account administration and sales cost.

This is an asset and is on the book as so. They sell those assets off " depreciated assets " at cost too the common share holder. The common share holder group amortises the sales and administration cost to other consumers " accounts receivables ".


So the common share holder has taken on the burden of all the liability of the receivables and payables from the company and its owners. What the company and its owners have taken on are all the expenses of building the product or providing the service to build a product or service for the consumer.


So what does the investor get in return from providing this service to the company. The common share holder gets the interest that would of been paid too the ones holding the payables as well to recieve interest payments from the payables taking those charges of the balance sheet and redistributing that liability to the shareholders them selfs.

Let's look at the hedging effect that has been set up by this action for both the company and its share holders.

Well first of all the company can lock in the payable interest rate up too twenty years, the recievable interest rates is a variable rate set by the central banking system.

So here we see there is a zero sum return should the product or service not produce a profit. This of course is dependent if we're in a rising interestrate invirorment or falling interest rate inviorment.


Let's say it's rising interest rates and we have a positive admortization for the product or service the company is providing for its customers. We will assume a 30% leverage on the cost that would give us a thirty percent leverage between the payables and receivables interest as well minus of course the variable and fixed interest rate charges.


Now time leverage also plays a roll but let's leave that for now. This is all mentioned in the articles of the corporations and dffer between articles written up between different organizations.

So maybe the banking business isn't so bad after all in a falling interest rate inviorment in a rising one not so great.

You can see if retained earnings is a thousand dollars a month at .0001 % leveraged 30% giving you .001 on let's say the liability is a billion dollars x .00003 plus don't for get the liability of the recievables not being paid granted one should have multiple customer interest and not just one customer. I won't get into the pros and cons of those risks here today.


So what is the potential gain for the investor with the figures I gave you. Well you want to move four decimal places and times it by three. Three hundred thousand dollars divided by a billion shares or what ever the outstanding shares are. Now remember for every share priced at par plus the leverage set on the share taking into account the forward splitting of the shares and we have some serious leveraging taking place for the common share holder and the company to deliver product on.