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Technology Stocks : THQ,Inc. (THQI) -- Ignore unavailable to you. Want to Upgrade?

To: crysball who wrote (7260)	7/25/1998 5:29:00 PM
From: gofrank150	Read Replies (1) \| Respond to of 14266

<< Am still of the opinion THQI uses reserves to "smooth" quarters performance, and am wondering if there is any way to divine the actual uncollectible receivables (bad debt) experience quarter to quarter or even annually and then apply it backward based & forward based on seasonal patterns?>> Actually, the only way they could do this is by reserving more one quarter and significantly less another. A week or so i posted reserve info by quarter for the past 2 years and it was amazingly consistent at about 9% until the last 2 quarters when it went up to 12%. So it doesn't appear to have been any wild fluctuations which would indicate they were using it to manage earnings. Now release dates....that they use, as we are seeing now with pushbacks into 4th / 1st quarter. Also, keep in mind that reserves are not just for bad debt, they can be used to subsidize markdowns with key retailers on games that don't sell as well as expected (like Ghost, Ray Traces, Broken Sword, VS, etc.) The reserve balances are given on each 10q / 10k. Knowing the reserves (i.e. dollars 'in') and the beginning and ending balance, you can roughly calculate how much is spent (i.e. dollars 'out') each quarter from reserves. For example, reserve balances were $4,358,000 at yr end 96 and $8,139,000 at yr end 97. Total reserves made last year were $10,509,000. So, you can determine that 4358 + 10509 - 8139 = 6728.... so they spent about 6.7 million from reserves last year. Chris