"just something to consider, esp when valuing hard goods distributors..."
Yes, that could be true. As I say though, for me, I've never found such be helpful, and I don't spend even one minute looking at a/r or dso for distributors. Or earnings for that matter.
Not saying what I do is the best way, or only way, or that a/r dso couldn't or doesn't work for somebody. Just saying what I do, which is I buy distributor stocks based on p, bk, debt and maybe inventory level. In normal times (periods of normal business cyclicality), I've been satisfied with results obtained from a formulaic approach applied to a package of these stocks. |
