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> ...management's emphasis on keeping prices low and heavy infrastructure investments... The article is talking about the decrease in net income and infrastruc
by k2enemy 14y ago
> ...management's emphasis on keeping prices low and heavy infrastructure investments...
The article is talking about the decrease in net income and infrastructure investments doesn't decrease net income. I've seen a lot of people suggest that the low profit numbers over the years are because they are doing a lot of investing in infrastructure that will pay off in the future. That might be true, but investment isn't on the income statement and doesn't show up in net income.
- larrydag 14y agoIf it increases Operating Expenses then it would have an impact on Net Income. The actually money to invest in the assets may be in a different place on the balance sheet though.
- rob08 14y agoAny investments made that are meant as long-term (i.e. >1year) is capitalized on the balance sheet and is a use of cash in the cash flow statement. Any short-term operating costs related to those investments are likely to be expensed during the period in question and thus be recognized in the income statement. Opex may also be higher (and consequently lower profit) while heavy investments are made because the company hires a lot of more staff which do not start generate any revenue until a later period.