From the amount of the revenue withheld, the loss of profit will be "derived". Opinions are divided about the type of profit and its rate.
Profit Type
- Danan argues that gross profit ("sales deducting the cost of sale only, without deducting other expenses such as management and general expenses, financing expenses, etc.", paragraph 42 of its summaries), as opposed to operating or net profit (see also paragraph 45 therein). The agreed expert, CPA Barnea, did not accept this approach, determined that management and general expenses and sometimes also financing expenses should be reduced, and referred to a net profit[9].
- I accept CPA Barnea's position on this matter. It may be remembered that this is an expert whose identity has been agreed upon in advance between the parties, with all that is implied regarding his professionalism in the relevant accounting field. This was also evident from his testimony during the interrogation, which did not confront or defend himself, and when The expert was not afraid to confirm options that could affect the outcome of his opinion in favor of the party on whose behalf he was being investigated. I did not find any justification for interfering in his professional position on the matter.
- Possible Also To note that no 'external' opinion was brought on behalf of Danan and her position was brought only by witnesses on her behalf, and especially Dekel, the CFO, who carried out the calculations for Danan, and who is also the one who is entrusted, among other things, to the financial reports that are transferred to the accountant in order to give an opinion if they were properly prepared (CPA Yishai, pp. 23-29).
- The claim that Gross Profit It is customary to calculate withheld income (pp. 360, paras. 1-17), which was not actually collected and, more importantly, was not convincing in the concrete circumstances. Danan's position is that there is no need to bring in an additional CEO or financial manager, and therefore in the prevention of profit, we should talk about the loss of gross profit (paragraph 45 of its summaries), but even according to Danan, there are cases The Justifiers Reduction of such expenses: "Unless there is the opening of a new company or an activity that requires the investment of management and generality" (p. 360, paras. 12-13). Testimonies on behalf of Danan herself showed that a very significant amount of managerial inputs were invested in the activity (pp. 324, 17-20; p. 325, 13-16, 27). Activity of this magnitude can inherently harm management's ability to promote other activity, perhaps in a field that already carries profits. If she tried to save on this, then after about a year, Danan herself decided to bring in three management people for the purpose of the activity (p. 329, s. 26 - p. 330, s. 2).
- The Expert Agreed upon He did not make his job easy. In the question of profit, he did not address only the fundamental aspect of raw versus clean or operational, but examined things on their merits As follows from the way he estimated the profit rate (Below). Such an examination is consistent with the basic intention underlying subsistence compensation - placing an injured person on the spot in which it should have been if it hadn't been for The agreement was breached.
Profit Rate
- Danan, which relates to gross profit, argues that in the installation of hoods, the rate of profit is only 7%, while in the provision of services in this field, the gross profit reaches 74% (paragraph 33.2 of the statement of claim).
- The expert appointed with the consent of the parties made a change in the gross profit that must be calculated in respect of the installation of hoods (it was noted that according to data obtained from Danan, the calculation made by it in this section credits 25% of the income to labor expenses and 67% to the cost of materials, but on the basis of other accounting documents of the company, the expert is of the opinion that the labor expenses to be attributed are 40%, and an adjustment has been made).
With regard to administrative and general expenses, the expert was correct to assume that in view of the low profitability of this component, these expenses would be smaller than their share in the audited reports (12%). In the expert's assessment, the clause ended in a balance[10].