| L, The DSO are 73, 61 and 80 for the March, June and Sep quarters. As Jay pointed out, the QOQ growth rates were respectively 39%, 26% and 23%. I van understand the DSO bumping up a little in a quarter with a huge growth like the 39%, and di not raise a flag on that in April. I cannot understand DSO going from 61 to 80 when the growth rate (QOQ) declined from 26% to 23%. Furthermore, the fact remains that the increase in sales was only $30 MM while the increase in receivable was $50 MM, meaning that $20 MM of sales from the last quarter, have not yet been paid. What is wrong with that analysis? Sure there ar alwys some small amounts of receivable that go beyond 90 days, but most terms are 30 days net (and discounts often when paying faster), so an average of 50 DSO is what you find in well run companies. If there is a huge bulge in sales, (like SNDK' first quarter) you can see the DSO bumping up a little. SSTI another flash company I follow closely had a 59% QOQ growth and their DSO is at an acceptable 61 days for such rapid growth, their sales grew by $62.5 MM but AR by less than $40 MM, (from meory, you may want to check), thus I had no reason to raise a yellow or red flag. When accts. receivable increase in a quarter by a substanial margin more than the sales, you have a problem, period. No sense burying our head in the sand. Lets find a rational explanation. |
