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Financial Strategy: Why Do They Require People to Buy the Mark VIII E-Meter?
John P. Capitalist - Financial Strategy: Why Do They Require People to Buy the Mark VIII E-Meter for Cash?
http://www.johnpcapitalist.com/2013/12/why-buy-e-meter-for-cash/
Read the entire post.
Excerpt:
John P. Capitalist - Financial Strategy: Why Do They Require People to Buy the Mark VIII E-Meter for Cash?
http://www.johnpcapitalist.com/2013/12/why-buy-e-meter-for-cash/
Read the entire post.
Excerpt:
Here’s the magic trick: if you can take in deposits then gross cash can go up even if net income is negative. For example, if the cult does $200 million in sales, $30 million in operating profit, and pays out $30 million in legal settlements, then net income was $0. But if you also add in $40 million in deposits greater than revenue, gross cash goes up by $40 million which looks pretty good. You could almost feel like you were doing something right. The only problem is that while deposits make gross cash go up, net cash would go up by $0, which doesn’t look good.
So now you can see why gross cash is a much more likely number for Miscavige to manage. By extracting deposits from your customer base, you can make gross cash look good even if the rest of the business is turning to shit.
That, in turn, explains why he fights so viciously to not only avoid giving refunds, but to avoid giving back money on deposit. If he were managing revenue, he’d hate to give refunds because that takes revenue down. But if he’s managing gross cash, that is why he fights so viciously about money on deposit.