Promotion of Accounting Reform as the most effective Pathway to a Fairer Safer and more Prosperous Society. Comment and Support from all quarters is Sought to straighten out NZ's problem

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November 2007 Edition ---- to page back through Previous Editions click here

Well we have enhanced the October edition over the month and believe it is worth another look. It has turned into something of a classic. Click here.

We might limit this one to a graph which adds a bit of colour. Here it is!

Well this is the top portion of the graph which exaggerates the yearly fluctuations, but fluctuations there nevertheless are. The years 1993 to 2003 are contained in page 37 of the 2004 Feltex prospectus. Feltex have calculated average growth as being the difference between the 1993 and 2003 years which is 1.7% per annum compounding. Their calculation takes into account only those two years. They have worked upon a mid-point philosophy to say it is a span of 10 years. We say least squares regression analysis is the correct way to calculate the annual growth and ten years means the figures for 1994 to 2003 only are used. This gives an annual growth rate of 0.32% p. a. compounding. The 1% growth rate, used to calculate projections in the prospectus, is not below the 10 year average as they claim but somewhat above. An unjustified 1% increase in sales likely to mean an unjustified several percent increase in projected profit. And it indicates that they are not being conservative in their measurements.

We say that all sales support from the vendors should have been declared in the prospectus and we are not aware of this having been done.

Deficiencies such as these should have been highlighted in Securities Commission and Liquidator's reports.

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