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Technology Stocks : Vitesse Semiconductor -- Ignore unavailable to you. Want to Upgrade?

To: Bulldozer who wrote (2766)	7/26/1999 12:55:00 AM
From: Chuzzlewit	Respond to of 4710

Bulldozer, I saw similar comments from Lehman. DSO is calculated as Receivables / Sales x No. of days in the period. The only ways that DSO rises are: 1. Decrease in the rate that customers pay for goods; and/or 2. Back-end loading of sales; or 3. Growth of sales during the quarter. It seems inconceivable that VTSS would alter their terms simply because LU is outsourcing. Perhaps what happened was that shipments were delayed to Solectron until the tail end of the quarter which would back-end load the quarter and cause a buildup of inventory. Is that what you are implying? And if so, the delay in receipt of cash would be from shipments at the beginning of the quarter, not the last few weeks (a DSO of 74 days means that is the mean time between the sale and the receipt of cash, or about 10 1/2 weeks). TTFN, CTC