Exactly, I am sure that all comps are expensed at full value and what other expenses are they allowed to take in this industry that may seem unusual to anyone not an account in this industry? If these numbers reflect the real picture of these businesses then we would have executive management changes every 6 to 9 months at a lot of these companies followed by many more casinos going under. Since it doesn't seem like this is/has been the case and with the investment into construction and remodeling still proceeding, both suggest that more positive signs lurk below the surface of this financial snapshot.
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--- In vpFREE@yahoogroups.com, "vp_wiz" wrote:
The Abstract might well have you thinking the average casino manager is shouting "we lose money on each room, but we make up for it in volume!"
Still, never try to interpret an income statement without a sensible cash flow statement in hand as well.
There have been plenty of "loss" businesses that generate a steady cash stream, and conversely, plenty of "profitable" businesses that have bled cash profusely. Over time, both statements (P&L and cash flow) necessarily tie to each other, but non-cash entries to an income statement can largely distort the true health of a business.
In any case, when you consider the relatively recent construction spate in combination with the current economic downturn, is it any wonder that many casinos (particularly those on the Strip) are showing a loss presently?
- H.
--- In vpFREE@yahoogroups.com, Barry Glazer wrote:
>
> Thanks for the second effort to get the link embedded - it really is an interesting article.
>
> Casinos overall losing money BEFORE taxes is really something to me! Add in the 7.8% in taxes and gambling fees on their gambling revenue, and you're left to conclude that they'll go out of business unless they offset all this with their non-gambling revenue. Question in my mind is, are they doing that?