RE:RE:Buy, Hold, or Sell?Bookworm
I will give you a pretty simple examply. I own a manufacturing facility I sell 5 million worth of merchandise Accounts payable 5 million is an asset. I purchase 3 million worth of good to make my finished product. I now have payables of 3 million. On the surface that would tell you I have a net profit of 2 million. But what if you look at my payables and they show that 3 million of that 5 million in sales is 90 days now and may or may not get paid. Either way you have a cash flow event....So you need to look closely at payables. Next if a company like Chorus operates on a very large debt you need to look at debt dates and where interest rates are moving. Just a couple of things to keep in mind. Also as I recall they had a currency gain which is what put them in the green not an operating profit. I am waiting for next quater to get more clarity on where they stand. Watching their cash flow more closely than whether they show a net income!