Replies to post #1175 on CBQ, Inc. (China Business Quotient) (fka CBQI)

[INVEST7168]

BIX........SOME THOUGHTS ON VALUE

It was nice meeting you last nite.
I welcome your ideas on measuring corporate performance.
The problem is that TODAY all we have to look at are
figures on previously unrelated and independent companies
A, B, C and D.

Even if we have perfect numbers, the summation of companies
A, B, C and D will not relate to the future performance
of the consolidated company ABCD which probably will be engaged in a different business MIX than either A or B
or C or D.

That different future business is likely to be the present businesses of A and B and C and D.........PLUS SOFTWARE OUTSOURCING TO CHINA. There is no way to measure today the outcome of China outsourcing by the consolidated company ABCD.....simply because it has not yet happened and we
have no paper trail by which to measure.

Unfortunately the future value of ABCD is

a. the historical sum of present unrelated businesses
of A and B and C and D

b. minus your guesstimate of cost savings from duplicate functions and discontinued services and new services

c. plus a wild subjective guess as to China outsourcing both as to volume and profitability

Here is a silly example. You have a pound of carrots, a
pound of tomatoes and a gallon of water from which ingredients one is asked to forecast the taste and
quality of the future vegetable soup. It cant be done.

The biggest unknown is ""will China outsourcing succeed
and how big could it be?"".......$10 mil year? $50 mil
year?,$100 mil year? .....and will profit be 5%, 20% or
50%. Pick your variables and you get wildly different
answers.

Best suggestion is to add the known info from A and B
and C and D to get a base.....then look at figures for
INFY and GUESS what CBQ could develop......and add them together to form a wild subjective projection.

The important thing to remember is that the future CBQ
is not the mathematical extrapolation of historical
A and B and C and D.

You are on right track but unfortunately all the hard
figures you need to value the company do not yet exist.