William, Harry, rudedog and all, Re:
<<The company factored, or sold off, about $500 million in receivables during the first quarter, down from about $700 million in the fourth quarter, Mr. Mason said. Such transactions allow a company to convert its bills into cash more quickly, albeit at a discount. The practice, which is more common in the retailing industry, raised eyebrows when Compaq disclosed it for the first time several weeks ago.>>
Can someone explain why Compaq has to factor receivables (at a discount) when they have billions in cash? It just doesn't make any sense and makes it appear that they are hiding something and/or manipulating the inventory/channel numbers.
Thanks,
Robbie |
