Book value down, is this something to worry about,
An observation I made comparing XRO's book value per share at the end of 2015 financial year it was $2.56 and end of 2016 it was $2.05 or a drop of about 25%.
Product design and development expense 2016 - $ 69,664.000 versus 2015 - $45,532.000 an increase of 53%
Is it something to worry about that after about 8 years of development of its software product design and development expenses are still rising by 53% and the book value drops by 25% in financial year 2016. It is my understanding if past software was more durable, amortisation would be less and the book value per share would not drop by an material 25%.
I realise there are many other factors having an influence on the book value per share but an 53% rise in software product design and development expenses seems substantial and a mayor hurdle to eventual profits.
What do the accountants and IT share traders on this site think?