GuySuCo: Mired in a sea of losses and bailouts
Posted By Dr Clive Thomas – March 30, 2014
From a dynamic perspective, over the medium to long-term the profitability of the sugar industry as a whole, and GuySuCo in particular, is more than any other variable, the best representative indicator of its sustainability as a commercial venture. From a business accounting standpoint the profit that is made indicates the extent to which total earnings or business income derived from sugar can cover all sugar costs or business expenses, thereby resulting in a surplus of income over these expenses or Accounting profit.
From this vantage point, in order to ensure genuine sustainability these costs or expenses should include 1) all employment, materials, and services costs; 2) all set-aside provisions for research and development (R&D); 3) similarly set-aside provisions for maintaining/replacing the capital stock; 4) similar provisions for servicing debts and liabilities (both long-term and short-term) in a timely manner; and 5) the generation of adequate returns(dividends) for the industry stakeholders/shareholders; and also sufficient to attract new investments if required or alternatively to retain enough profits to finance such investments.
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