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Pervasive Software (PVSW) Message Board

  • FICA_Dude FICA_Dude Jan 16, 2002 9:49 AM Flag

    Unaudited profit misleading?

    I noticed pvsw's fine results but I'm concerned that "stockholders equity" did not increase dollar-for-dollar from the addition of 6 months net income.

    Specifically, June 30, 2001 equity equals $29,679. This increases by only $919 to $30,598 as of Dec. 31, 2001. This is only half of pvsw's reported 6 month earnings of $1,772.

    This 5 cent per share negative hit to equity is not going through the income statement and is not in earnings per share.

    Can anyone explain what is being lost by pvsw that is not reflected in earnings?

    Is this some kind of accounting trick?

    I know these statements are this a red flag.


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    • I'm trying to look into this question. At quick glance this could be stock repurchasing, foreign currency adjustments, etc. I will study it more closely today.

      So far, the largest such reduction in equity came from "foreign currency" fluctuations. Pvsw wrote down the assets it was holding (denominated in foreign currency) to the balance sheet exchange rate.

      If this is the reason for the June to December 2001 reduction in equity, then this has the potential to hit the income statement going forward. If accounts receivable and/or inventories were written down because of exchange rate losses, these losses will only effect stockholders equity until the receivables are actually collected and the inventory is actually sold. Then the paper loss becomes a real, income statement loss.

      Like I said, I don't have the details yet and I'm just speculating at this point.

      Still, your question was a good one and got me thinking.

      I also agree, everything else about Pvsw looks very good.

    • some shares were repurchased during that period I believe...this may be the answer but I have not looked myself.