[Leica] How to read a balance sheet

[Erwin Puts <imxputs@knoware.nl>]

There is a strong impression with the currently active contributors 
of this list, that he downward trend of the R-sales is the cause of 
the alleged financial troubles of Leica. Can this impression be 
supported by facts?
I collected some figures from the Leica financial reports from 1995 
till now. Read with me.
In 95/96 turnover was 240 M (in Dmarks). profit was 9.5 M and the M 
and R turnover were 70 and 43 M
In 96/97  turnover was 266 M (in Dmarks). profit was 9 M and the M 
and R turnover were 75 and 65 M
In 97/98  turnover was 280 M (in Dmarks). loss was -17 M and the M 
and R turnover were 73 and 67 M
In 98/99  turnover was 265 M (in Dmarks). loss was -14 M and the M 
and R turnover were 70 and 42 M
In Q1 of this year  turnover was 57 M (in Dmarks). loss was -2 M and 
the M and R turnover were 16 and 9 M

Now these figures are of course incomplete. But the hypotheis is that 
the R sales are responsible for the current losses.
Look at the 96/97 and 97/98 figures. M and R had the almost identical 
turnover in both years. Still in 96/97 a profit was recorded and one 
year later a heavy loss, but with identical R sales.
In 95/96 and 98/99 we have two comparable years again: identical M 
and R sales (70 and 42), but a profit of 9.5 versus a loss of -14.
If we project the Q1 figures to a full year (the Q1 is a traditional 
underperformer, so you should use a factor of 4.5 to get to full year 
figures) and we should accept the Board's view that there will be a 
slight profit
Turnover 257 M, profit 1 M, turnover of M is 72 and of R is 40. Let 
us accept a still lower figure of the R sales, let us say 36 M.

It is evident that the simple claim that the R sales is the sole and 
direct cause  for the financial troubles of the company cannot be 
upheld. There is no correlation in the 5 year time span between R 
sales and profit/loss figures. See it for yourself;
Year	R sales	Profit/loss
95/96  	43	+9.5
96/97	65	+9
97/98	67	-17
98/99	42	-14
(99/20	36	+2)

I am not as some of this list claim a blind admirer of Leica and its 
products. I am a blind admirer of facts and a cool analysis of these 
facts to support claims. And as wild guesses are made, however 
plausible on first sight, that do not stand the scrutiny of the 
facts, I feel obliged to point that out.
My position may look like  defending Leica against all odds. No I am 
not general Custer.
Of course I do know that  the R line is selling below expectations. 
And I am aware of the fact that AF in a high end SLR is for many  a 
desirable feature.
 
This BTW is my last post to this list.


Erwin