Inspired by the Aurora Cannabis Q3 release and the tripling of its stock, let's discuss some tricky math!
1. Gross margin, in a fixed cost business like Cannabis, is heavily influenced by production volume. Its a misleading metric at times. Check out the inventory being carried by Aurora and put some thought into the implications on margins.
2. Valuation multiples (doesn't matter if its revenue, EBITDA, cash, earnings) are hyper sensitive to assumed GROWTH. How much future growth is a reasonable assumption?
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