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Technology Stocks : Intel Corporation (INTC)
INTC 48.76-0.1%3:11 PM EST

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To: Barry A. Watzman who wrote (36731)10/18/1997 1:32:00 PM
From: exhon2004   of 186894
 
Barry:

re <Receivables do not impact EPS.>

This is not entirely true. There are numerous ways to finance a firm. To the extent that a firm is carrying receivables these must be financed. Interest payments to finance receivables is an item that impacts eps. If a firm generates cash quickly from it's sales any excess cash is invested and generates interest income which helps eps.

Understanding what is happening with a firms receivable balances can tell you a lot about what is going on in their business. One outfit osii had dropped from 52 to 20 practically overnight. The local press story said there was no reason for this drop. When I analyzed their financials I noticed two changes:

- their receivables doubled in aging 90 to 180 days.
- their 42 year old CFO "retired".

I know some people that jumped on this stock. I stayed clear. It subsequently went down to 4, although it has since recovered to >10.

Best Regards

Greg Gimelli
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