SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Technology Stocks : EMC How high can it go?
EMC 29.050.0%Sep 15 5:00 PM EST
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: linda_marie who wrote (10384)6/8/2000 9:19:00 AM
From: JDN  Read Replies (1) of 17183
 
Dear Linda-marie: The next poster gave you the URL for explanation. Let me just add that this is just a fancy term for something most of us accounting types already knew. Basically, it measures how a company utilizes SOMEONE ELSES assets. To achieve a good ratio generally one must have rapid turnover of inventory and receivables (good) and slow pay on trade payables (not always good IMHO but improves the ratio). The theory I believe is an extension of return on assets. Generally one likes a high return on employed assets owned by a company. One can boost that return by utilizing trade payables (interest free) to finance ones business. The problem with this flow ratio is it seems to me a stagnating company (low or no growth) can more easily attain a good flow ratio while a fast growing company like EMC may have a harder time of it. Why, cause receivables and inventory may grow faster then trade payables, first because sales (create receivables) have little comparison to payables and inventory manufactured in house includes far more then hard goods payables, ie labor and overhead have to be applied. So, IMHO EMC's high flow ratio is perfectly explained and not a weakness as it might imply. JDN
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2026 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News