It seems like net income topic is a little bit controversial issue ere.
It seems that some of us really want the company to show net profit at the end of the quarter... However, If any of us were running the company, would it really be in our best interest?
I personally believe it's much wiser to reinvest their income back into the company to position for much faster growth later on. If the company doesn't plan to pay dividend (which I hope they don't, rather use the money to grow!) why would I care about the size of net income as far as accounting for it goes?
So what if the company didn't spend the 0.7M on a mysterious 'infrastructure' (whatever that means)... We would show approximately 2.5-3 cents EPS (after tax) and some bragging rights. Would probably send stock upwards a little bit, but in reality would be worse for the company in the longer run.
Interesting how JN mentioned that he has witnessed companies who weren't willing to raise capital for future growth. I guess small business mentality is to start cashing out asap, whereas larger organization needs to be expanding 'agressively' to become a 'supercompetitor'
If company has net income they obviously have to pay taxes etc.
If they do make income I'd rather see them repurchase couple hundred K of stock. As long as they are actually growing and spending operating profits to further growth, I really don't care what's at the bottom of the statement.
What are everyone's thoughts?
P.S. If I understand correctly, the only reason cash appears to be couple M less than previous Q is because their AR has gone up by a similar amount. As soon as they collect what customers owe them, cash should be back up.
Both cash and AR are assets so it doesn't affect the balance sheet.
Again, if I am wrong, please correct me.
