prelim report, page-21

G'day Dhukka,

Thanks for your reply and let me assure you that I don't mind that you come up with different outcomes than me. It's all grist to the mill and I guess we will discover which one of us is further from the truth in about 12 months time. :)

As i see it, now. The significant difference in our base assumptions are that you are projecting sales about $5.5m less than me. That's about 15% less than mine - probably not significant enough to argue about.

Whilst your figures add up, I am curious about why you have chosen your methodology - ie that of seemingly arbitrarily picking a PBT (profit before tax) percentage rather than taking a stab at the actual overheads.

Surely doing it that way round does not take into account an actual examination of the business operations. (Or if it does then it is one step removed). What I'm saying is that your method is to choose a PBT then derive what the overheads must be to fit that PBT assumption. To me, that is the wrong way round - I'd rather take a stab at the Overheads and then calculate the PBT. I know that my Overhead figure can only ever be an intelligent guess but at least it has some basis in actual observation of the business. Guessing a PBT seems even more fragile?