From the Olympus Website--A little better translation than DPReview

Started Feb 14, 2013 | Discussions thread
John King
John King Forum Pro • Posts: 14,941
Re: Cost accounting and reality.

Craig from Nevada wrote:

John King wrote:

Craig from Nevada wrote:

Lets assume world digital camera sales are above 115 million cameras

Let's assume Olympus has market share of about 10 percent or about sales of 11.5 million

Lets assume Olympus Imaging loses $170 million this year on cameras only, but breaks even on lenses and accessories.

Olympus is losing almost $15 on each camera it sells.

Let's assume a ladder ... (very old joke about the chief financial controller and the managing director)

Sorry, but you would not even passthe first unit of cost accounting on that analysis ...

AND there are two units in that subject that you have to pass in order to obtain a professionally recognised accounting qualification ...

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LOL, John

I am an economist, not an accountant.

Micro economics is a science; economics is ...

It was just for illustrative purposes to highlight the depth of the problem. $170 million is a pretty steep loss.

Anyone can illustrate anything using that kind of example, Craig.

We have a federal treasurer here who really believes that moving a $22Bn deficit from 2012/13 FY backwards into the (closed ... ) 2011/12 FY translates into being a surplus for 2012/13FY. BTW, that made the federal deficit some $44Bn for 2011/12FY ...

If I had ever prepared books of account for any of my clients in that way, the tax office (ATO) and companies office (ASIC) would have had to stand behind my professional body to take their turn to put me in jail for fraudulent accounting.

It's not just Olympus that have been involved in dishonest accounting practices .

BTW, who would have thought that the average Australian buys a new mobile phone every 6 months? I wouldn't have, but the statistics show that it is something like that. My last one was 4 years old when retired (still works for emergency numbers ... ); and the CEOoDO's last phone was about 10 y.o. when the battery started to die. Her current one is now about 3~4 y.o.

With 7Bn+ people on this planet now, why do you think that world wide digital camera sales might be 115 million p.a.?

If the camera companies combined had the imagination of the wheel nuts on a truck, they could probably move a lot of their stocks of digi-cams in the third world.

It would certainly make a "contribution margin". This is money earned from selling stock at a loss that would otherwise be scrapped. This then makes a contribution to defraying sunk costs. i.e. far better to make a loss of (say) $100M from running at a loss, than it is to shut down operations when fixed costs are (say) $300M.
In the first case, one makes a loss of $100M. In the second case, the loss is $300M ...

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