Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Microcap & Penny Stocks : CBRB : CBR BREWING - OTC:BB -- Ignore unavailable to you. Want to Upgrade?

To: CIMA who wrote (15)	5/25/1999 8:34:00 AM
From: WallStBum	Read Replies (2) \| Respond to of 35

CIMA- If I may take a crack at your question about working cap. In reality, as of 3/31/99 CBRB has more like $3.5 million in working cap. It's accounting magic. I don't like it, but it's simply the way they classify the balance sheet. I'm guessing the auditors make the company to do it this way. To oversimplify, there are transactions with an associated company and there are balances, both assets and liabilities from and to that company. There is a liability of $26 million to this company that is classified as a CURRENT liability. There is an offsetting related company asset of $30.5 million is NOT classified as current asset. So it effectively reduces "accounting" working cap by $30.5 mil. They should either each be current or each be non-current - for our purposes I would consider each to be non-current - that pulls the entire net related company due to/from out of the working capital equation. That leaves a REAL working capital of about $3.5 million or $.43 cents per share. While these guys do have some payables to manage, they've got $12.7 million ($1.59 per share) in cash, $19.1 million ($2.39 per share) in accounts receivable and $9.3 million ($1.16 per share) in inventory. That's over $41 million or $5 per share in liquid assets before factoring any discounts to receivables or inventory. And let's not forget the EPS and relatively high positive operating cash flow. The valuation ratios appear to be reeeally out of whack on this stock. I've yet to find a good reason why. I hope that helps. You can also go to freeedgar.com and pull up their latest 10-Q which explains the related company transactions in much greater detail. dax