Don't make the mistake of equating revenue with receivables (or billing). Many/most times, billing is related to contractual issues, which only coincidentally have the same timing as revenue recognition. For example, your cable company bills you in advance for service, so they set up a receivable, but until they actually provide the service, they can't book the revenue - hence, deferred revenue. If the cable company suddenly doubled their deferred revenue, that would be a good thing, since (assuming they provide the service) it would mean they had doubled the number of subscribers. Of course, since they now have much higher receivables (receivables were created when they sent you the bill), but no corresponding increase in revenue yet (not until next month), the DSO's look terrible.
I'm not saying that's what happened with SEBL, but deferred revenue increases or increases in DSO's are not necessarily bad. If you still have concerns, contact SEBL directly for more info. Don't forget to let us know what you find out, of course <g> |
