Replies to post #53810 on Muscle Pharm Corporation (MSLPQ)

[learning curve]

I still haven't been able to see report....is this how the got to the $67m instead of 78m like MP said?

This is beyond bogus (suspect) without an explanation; Unless it is an actual exchange of funds/cash; anybody could over value their product thus inflate sales....

[Deep Space]

I have none,but I can guess and have thought about it myself.

Not being right or wrong but it looks like they

Offer buy two Assaults and get one free Battle fuel?

The revenue is marked for All three and tracked as a discount for the Battle Fuel.

We have sold THIS(In customers hands) much and net This much money.

I thought they were going to back off on this some per CC.?

not yet,but it is tracked.

Just some thoughts on it JLTG.

[crossroad]

jltg, I don't know exactly how it is recorded (I have a finance background, I don't know the accounting treatment of this). However, I can explain it to you the way I understand it:

1. You will have to record all your sales in your internal book at your regular price (I mean, average price for your products to wholesalers like GNC), including give-away portion, and deduct the give-away part to get net sales number to be reported in your published financials.
2. You, however, record cost for all your goods sold, including free stuff in your book to pair revenue with cost. In other words, you pay for your or distributor's promotion in kind.
3. For analytical purpose, gross margin calculation is tricky as you will have to calculate it based on your gross sales, not on net sales. If you look at Musclepharm's pre-accounting-mess financials, you will find gross margin recorded over 30%. This actually put me in trouble as I thought the cost was included in promotion.

[prokopton]

"Can someone with an accounting background give me an explanation of the three line(sales-discounts=net sales) reporting of sales."

I have an accounting background but won't bother with the specific
numbers since I'm no longer a shareholder.

In layman's term, it means, "This is crazy Brad's warehouse! Our prices are insanely insane. Our discounts are so steep, even our competitors can't match them! We make 'em for $1.20 and sell them for $1.00! You think our discounts are crazy? Check out our accounting methods! We hide 'em and hope they can't see 'em!"

[Showmethepennies]

Just concentrate on net sales. The ad allowance is the discount they offer retailers to display their product. They tried to classify this as advertising expense under SG&A in the past but that is not correct GAAP reporting. So the net sales line is what they're actually selling for.