Lease to buy, page-20

If LPAS is leased, then how is it reported in the P&L?

Cash flows in very slowly under a leasing deal (unless it is effectively factored - which is not cheap) and therefore the company runs into a cash crisis faster and can't afford to build unit number two, or three or four......

The problem is not the product - it works.

The problem may be price - can't charge enough.

But, the bigger issue is that they actually need to sell a lot of these things just to pay the bills - let alone turn a profit.

Shifting the product and to a lot of customers is a pre-requisite for commerciality.

I just don't see it - and certainly not in the next 2-3 years.

Outright sale or lease is in one sense immaterial.

However, an outright sale makes it a capital purchase decision for the lab, whereas a lease arrangement means that the LPAS charge would be included in the operating budget.

That is a very important distinction.

It also raises the question of just how independent a lab is and what approvals from the hospital bean counters is required.

Very few labs can make their own plant decisions - and most bean counters do not care about anything except the bottom line.

Please also note that LPAS is good for high volume, simple stuff like urine tests - but may not be much good for other tests - so it limits the potential customer base to the largest labs that do lots of urine tests........

Keep a sober head about the potential of LPAS - a good idea it may be - but whether it will ever generate the sort of returns that many people on the forum hope is an entirely different question.

What say you Windshift?