Elite Pharmaceuticals Inc (ELTP)

[evenkeel]

If they had $4 million in revenues and a market cap of $25 million then that means it is trading at a little over 6 times revenues.

6 X $4 million revenues = $24 million market cap.

The large caps trade at between 2 to 3 times revenues but it's not fair to compare them to a company of this size.

The revenues themselves do not factor in what a market cap trades at though, only the shares outstanding and the share price do that.

how would the PPS change should the company put out an Abuse Resistant product that captures say $100 million dollars a year???

So if we had an additional $100 million in revenues and the company traded about the same prices to revenues that would mean a market cap of about $400 million dollars.

To get the share price you have to take the market cap and divide by the shares outstanding, say 400 million.

That means a share price of one dollar per share.

Added: I can't PM as i have the cheapie account, but yes the revenues do not directly affect market cap of companies. They do indirectly as traders buy and sell based on various factors including revenues. However companies have gone bankrupt with high revenues which shows that revenues alone don't mean much unless you have profitability at some point to go along with the revenues. Of coarse you can be cash flow positive and still lose money in the accounting department and stay in business, some businesses trade on cash flow for that reason.

This company going to cash flow positive is a good sign and is why they are moving in that direction now and why some like it, as it stops the bleeding of cash at least on the generic portion. If Lodrane ever was approved again, at least the ones that were pulled that was $4 million a year they lost that would slowly come back.

As some have said there is a lot that could happen to get the market cap higher here. For comparison ACUR trades at a market cap of about $100 million, but they also have approved abuse resistant products.