| NJ5 said: Sure, but it's a big mistake to discount a ~20% drop in overseas revenue due to the currency movements, when a lot of expenses are fixed (employee salaries, etc). Obviously drops in sales volume and price points don't help as you said.
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Their Fixed costs remain the same, their income would have dropped by 25% (reduced demand and currency fluxuations) and the new variable costs only come into effect for new production not existing inventory in the supply chain. Thats the reason why so many of them are struggling, its because the factors which reduce their variable cost only effect new production and the factors that reduce income effect their current inventory.
I would suggest they have a lot of inventory, though im not sure how their relationship with retailers works. Does shipped = sold or is there a right of return or a credit arangement?
Lastly the losses Panasonic may be facing are probably more on the book than really effecting their cash position. In times like these they won't spend as much on now capital for their business and much of the losses are probably depreciation on assets without the nescessary capital expenditure to replace them.
Tease.
