Mr. Fun,
Thanks for taking the time to check my calculations. My numbers are based on the 10-K, not the most recent quarter. Here are my numbers (and I'm rechecking my arithmetic as I go):
A/R $10,438
Inv $5,048 + 1,103 = $6,151
A/P = $2,878
Revenues = $38,303
COGS = $19,688
So, DSO = 10438/38303 * 365 = 99.5
Days Inventory = 6151/19688 * 365 = 114
Days in A/P = 2878/19688 * 365 = 53.4
CCC = 99.5 + 114 - 53.4 = 160.1 days.
Some analysts use averages which could give rise to different numbers. There is always a mathematical problem when dividing a stock (like A/R) by a flow (like sales). The exact number is less important than a consistent way of caluclating it, and noting the trends. And as I pointed out, there was great improvement in Q4 over Q3.
One of the reasons I wanted to bring these issues up here was in hopes that well-informed people like you, who are in contact with LU management, would be in a position to ask management pertinent questions. Hence, my reliance on your impressions from LU management.
I am not as concerned with short-term stock market performance as I am with the longer term implications of asset management. But I do believe that over the long run stocks are valued on the basis of cash flow. Certainly, cash flow analysis is a good way to evaluate management.
Thanks again for taking these issues seriously.
TTFN,
CTC |
