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Technology Stocks : WDC/Sandisk Corporation
WDC 139.14-0.8%3:59 PM EST
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To: Logain Ablar who wrote (16196)10/28/2000 2:29:07 PM
From: Bargain Hunter  Read Replies (1) of 60323
 
SNDK cannot record a sale while a purchaser still has the right to return the goods. When selling to retailers there is typically a sale-or-return clause, meaning that SNDK cannot be sure the product is sold until the end user buys at retail. During the time between shipping and billing the pending sales shows up in deferred revenue. I have no idea whether the retailer gets to delay payment until the product is sold, or whether they pay on some schedule and then claim a refund if they return unsold goods later.

OEM sales are probably different. It all depends on whether the OEMs have the right to return unsold goods. I suspect not.

This might mean that a shift from OEM to retail sales can increase DSOs.

Can anyone fill in the gaps?
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