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Diodes Incorporated Message Board

  • stockvictor stockvictor Mar 23, 2000 1:25 PM Flag

    Earnings net vs. operating


    Agreed, not diluting is a
    very beneficial for us. The expansion is being payed
    for by bot existing cash flow and existing debt
    equity means. Depending on the break down, if a large
    portion comes from cash flows then this could have a one
    time throtle back on net earnings. If this does occur,
    hopefully it will be clearly pointed out by management as a
    1-time cost. The inteligent investors will be looking
    deeper into the Q-to-Q increases of operating earnings
    ane realize that we have an incredibly good picture
    here. Especially without the effects of


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    • Since this is a cpaital investment the expenses
      are depreciated over time. It does not matter what
      the funding mechanism is; the cost is allocated over
      time against revenue. The use of internal cash and
      credit lines affect the cash flow but not the earnings.
      Issuing more stock would result in equivalent earnings
      (less interest expenses) but distributed over a larger
      number of shares. It would also improve cash flow. If
      the company has sufficient cash and credit lines this
      is by far the best way to go.

      • 1 Reply to viewfromparadise
      • Good point Paradise!

        I knew that there was
        something wrong with my analysis (a while since I studied
        accounting). As usual, the balance sheet and income statement
        is clear until the mysteries of cash flow muddy the
        picture ;-)

        That said- management's choice for
        expansion is the best possible avanue for the current
        investors. Many thanks to Mr. Wertz (CFO), Rosenberg (CEO),
        Soong (COB) and Liu (master of the Far


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