NJ5 said:
JEDE3 said:
NJ5 said:
JEDE3 said:
Ding! If Sony just produced 500k Ps3 slims last Quarter then the Ps3 could easily take up 200million of that 300 million.
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I think you misunderstand how financial reporting works.
When a company manufactures a product, two things happen:
1- They pay out cash to buy the components and manufacturing of the product (i.e. subtracting the production cost from their income).
2- They put the finished product in their inventory, assigning it the value at which they'll sell it (to the retailer).
The only way that this results in a financial loss is if the production cost is greater than the price at which they'll sell it to the retailer.
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i expect to see profit in the gaming division from Holidays on. What you say makes no sense... So they just forget about the money they get after selling their product?
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They don't forget about it... as I said in point number 2, the sale value is added to the income as soon as they put it in inventory.
What happens when they sell it to the retailer is that the "inventory value" is converted to hard cash... but if the inventory was correctly calculated, this doesn't result in any income or loss.
Look at it this way. When the PS3 is made, cash is converted to inventory (and the loss or profit occurs here). When the PS3 is sold, inventory is converted to cash (normally without profit or loss at this step).
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Yes... and they haven't sold the ps3 yet... so they are paying for the inventory and not trading it in for cash... The steps arent complete yet. They haven't done number 2 (lol) yet.
