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Non-Tech : GRIN (Grand Toys International Inc) -- Ignore unavailable to you. Want to Upgrade?

To: MoneyMade who wrote (97)	12/10/1998 12:13:00 AM
From: Frank McVerry	Respond to of 495

GRIN - my earnings estimates. PART 2 The average profit margin for GRIN is about 4.1% but there is a good reason for believing that the Furby profit margin could be higher - the reason is interest payments. A significant part of GRIN's expenses is the interest on the short-term bankloans they use, to finance the payment to their suppliers - this typically can range from 50% to 100% of net earnings. The longer their stock sits in their warehouse and the longer their retailer customers take to sell the products and pay-off GRIN, the bigger this short-term interest becomes. Now, for Furby, hands-up those who think this will sit in their warehouse longer than 5 seconds ? I see no hands. Next question... how long will it take the retailers to sell the Furbys and will they ensure prompt payment to GRIN in order not to upset their Furby supplier (GRIN) who controls their future Furby deliveries ? Is it even possible that GRIN's retail customers will come rushing to GRIN's door with armfuls of Canadian dollars - payment in ADVANCE - just to ensure their Furby delivery ? I could believe that ! Perhaps even prompt payments for non-Furby items just to remain 'good buddies' with GRIN ! (OK, perhaps I'm getting carried-away here). Anyway. my point is, I think GRIN will save significantly on their short-term interest payments, resulting in an improved net profit margin and so better earnings. Next: my earnings estimates for the next 12 months (hint: they look good !). Frank