Posted by substance J on May 31, 2020 at 13:44:56 EST in reply to So what's the ultimate goal of analyzing this? That's an actual question, but my implied tone of skepticism could be summarized this way: if I'm going to imagine a scenario where the NGPC becomes successful, what criteria are appropriate to define that? Whether the NGPC was profitable or not, how can we understand the economic environment at SNK? There is anecdotal information from people who were there, and I assume SNK was publicly traded, so Japan's version of the SEC probably required a certain amount of financial disclosure. But that information doesn't help us comprehend the opportunity cost of developing and supporting the NGPC. It could have been profitable and still tanked, or a money loser that kept people employed. (n/t) from substance J.
To elaborate, this is the kind of thing I'm talking about: The company I work for is 25 people and does about $2m/yr revenue. A recent review of a long-standing contract showed that we'd been losing money for almost the life of the agreement. When the contract came up for renewal, our owners made the decision to re-submit it without amendment. They reasoned that if a new contract was rejected, reduction in workforce would be the result. The people assigned to that job were too valuable to fire, but the net effect would be the same - 3 other people would be laid off to eliminate the shortfall in billable hours. These types of losses are completely obscured by the huge profit margins on other work that we do. What I'm saying is that even if SNK's detailed balance sheets are available to us, they don't even begin to give us insight into the actual or potential outcome of the NGPC.
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