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Technology Stocks : Oracle Corporation (ORCL) -- Ignore unavailable to you. Want to Upgrade?

To: John F. Dowd who wrote (7860)	7/11/1998 11:51:00 PM
From: PLovering	Read Replies (1) \| Respond to of 19080

>>To JAC et al: Perhaps someone can explain why ORCl's receivables are 50% higher than MSFT's while their revenues are only 45% of MSFT's. << I suspect the "sale to bill" period is a good bit longer at ORCL than at MSFT. Gates has the leverage to demand interest on any receivables over 10, er ... 30 days old.

To: John F. Dowd who wrote (7860)	7/12/1998 12:28:00 AM
From: DanZ	Read Replies (2) \| Respond to of 19080

John, I came across an interesting article at pathfinder.com It doesn't directly answer your question but it will help you assess whether Oracle's receivables are trending in a direction that might upset investors. With regards to your question, there are two things that affect the level of a company's receivables: average collection period and volume of credit sales. One possible explanation is that Oracle has more credit sales than Microsoft. Microsoft does a lot of business directly with consumers. For example, you can buy software and services from Microsoft over the telephone or through their website and pay with a credit card. Oracle has a similar distribution channel but maybe Microsoft sells more like that. With regard to the average collection period, Oracle could have more liberal terms than Microsoft or Oracle might have a problem collecting their receivables. Another possible explanation could simply be the way the two companies account for sales. I'm really just brainstorming and don't know for sure why the situation that you described exists. Either way, I think the trend in receivables is more important than the actual numbers. For example, you might look at trends in Oracle's receivables turnover, day's sales uncollected, and torpedo number as described in the article. Dan