Thursday, December 6, 2012

Comparing Cosmetique Asia's Silka Papaya Soap 90% Average Annual Net Sales Growth With Other Companies

In our previous post, we showed how the Net Sales of Cosmetique Asia's Silka Papaya Soap grew from P365,034,832 in 2008 to P994,928,845 in 2011 -- achieving a Net Sales Growth of 272% in a span of just 3 years!

It's incredible that Silka Papaya Soap's Net Sales grew by an average of 90 percent per year!  And as they say, if it's too good to be true, it usually is.

Of course, the owners of Cosmetique Asia can say that their Net Sales Growth was because of the superiority of their product's quality as well as their intense and immensely successful marketing campaign.

Yeah, right!

Just to give you an idea of what real Net Sales performance are like for most companies, lets compare Cosmetique Asia Silka Papaya's Net Sales Growth performance with companies like Johnson and Johnson, Unilever, and Colgate Palmolive -- all of which have products similar to Cosmetique Asia.

In 2008, Johnson and Johnson reached Net Sales of  P 2,374,479,381 and in the following year, 2009, its Net Sales contracted to P 2,032,118,636 -- a decrease of 14.4%.

In 2010, Unilever achieved net sales of  P35,735,971,982 and in 2011, its Net Sales went up to  P38,859,784,456, representing an increase of 8.74%.

Furthermore, if we want to see how Cosmetique Asia's Silka Papaya's Net Sales Performance compares with Colgate Palmolive year to year.

In the matrix above, you will note that Cosmetique Asia's Net Sales growth increased 14.4% from 2008 to 2009, 32% from 2009 to 2010, and 36% from 2010 to 2011.  Silka Papaya's Net Sales Growth which had three consecutive years of growing by leaps and bounds -- an incredible feat, indeed.

On the other hand, Colgate Palmolive's Net Sales went down 28 percent in 2009, increased by 20 percent in 2010, and decreased again by 5.2 percent in 2011.

One thing you'll notice with real net sales growth is that fluctuates, increasing one year and decreasing one year.

Cosmetic Asia's Silka Papaya Net Sales growth is improbable and a sure tip-off that something screwy is happening with its books.

Either it really is experiencing a consistent Net Sales surge because of successful marketing and advertising (something that can be correlated to marketing and advertising spending), or it has been under reporting its real sales figures for years but is now just gradually adjusting it to reflect more accurate figures.

A research paper by Rosario Maranasan on Tax Evasion in the Philippines, a fellow at the Philippine Institute of Development Studies, describes the various ways companies and individuals cheat on their taxes:
Common practices of tax evasion include: under reporting of income, overstatement of expenses, use of fictitious receipts, the keeping of double sets of books, false or fictitious entries in books, fictitious transactions in the name of dummies, non-recording of sales, and others.
What Cosmetique Asia Silka Papaya is probably doing is under reporting its real Net Sales and by doing so, is reducing its gross income -- which is part of the basis for determining what it really owes in taxes.

Up Next: Cosmetique Asia Silka Papaya's Extraordinarily High Expenses Covers Up Its Real Income

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