Elite Pharmaceuticals Inc (ELTP)

[no2koolaid]

Let's talk about this...

Plus, the track record of return on R&D is quite questionable.

https://www.investopedia.com/terms/r/return-on-research-capital.asp

Return on research capital is a component of productivity and growth since research and development is one of the ways companies develop new products and services for sale. This metric is commonly used in industries that rely heavily on R&D, such as the pharmaceutical industry.

Return on research capital (RORC) measures a firm's revenues generated from R&D activities.
Return on research capital (RORC) is calculated by dividing current gross profits by the prior year's R&D expenditures. It usually takes more than one year to realize the return on R&D; sometimes, it may be realized over more than one year.

Elite's RORC? Based on Q 2 data...
RORC = Current Year Gross Profit / Previous Year R&D Expenditures

Where gross profits = 3,768,149
Where the prior year's R&D = 2,091,618
The calculation is 3,768,149 / 2,091,618 = 1.802

That means for every one dollar in R&D spent, Elite has generated $1.80 in economic value.

According to the data, Elite's track record on return in R&D investment is actually positive. So there is no question about it, Elite's return on research capital is in line with good pharma companies. Now, to be sure, there are many pharma firms that have a negative return and they would qualify as questionable. But, according to the data, Elite is doing fine.

OBTW: Just did a little comparative research and for their last Q PFE (Pfizer) had an RORC = $1.35. That means, on a comparative basis, little Elite is producing $1.80 v. PFE $1.35. If anyone is doing the math at home, yes that means Elite is more efficient and before getting into the question of logical comparatives, it remains that the data is the data and from it we can conclude that it would be inaccurate to say Elite's RORC is "questionable!" As the data just showed, it is not questionable. That is an undeniable fact!

Personally, I would like to see more data driven analyses rather than subjective pronouncements as if fact.