momoeagle, u still didn't get my point.
The meaning isn't about 240 days, but about the fact that it is not within your control
It is not Eratat has no control. They have already dropped the credit days from 150 days to 120 days, which means Eratat does have control over the credit days. When they began the transformation, 150 days is a necessary for the long term business growth. Now the transformation is on track, reducing it to 120 days make sense as the distributors have now grown financially stronger.
Thus, I completely disagree with the point you say Eratat has no control. It makes the business decision based on what fits the business needs best at that point of time.
Momoeagle, u can also refer to AR 2012. But, please to paint an accurate picture, please exclude the VAT and the trade deposits to suppliers. To compare trade receivables, we usually look at the latest quarterly report. To calculate financial ratios such as ROA, ROE, we usually combine the full year four quarters results, so that to avoid any seasonal or cyclical performance.
If you don't like a company that has inventories and receivables, then go and invest in a service company then. Product company will definitely have some inventory, some deposits and some receivables. if that asset is not in receivables, then a big bulk of assets will be in the form of inventory and trade deposits. Having high % of inventories and trade deposits are equally not as good as having receivables, isn't it?
Try talk to any electronics components wholesalers, which buy electronics in huge quantity. Ask them their about their inventory and the deposits. For electronics components, trade deposits and inventories will form big bulk of their assets too. U can go check out farnell or mouser electronics. Go look at the TV industry, go look at the furniture industry or go look at the car industry if u wan. Go ask them what's the average inventory turnover. anyway, the TV industry is a dying industry. The electronics industry is still shrinking and the demand is still far from its peak lol. And, don't forget standarded electronics components have very low gross margin (< 5%), even lower than apparels lol. The good thing about selling electronics is u can sell it online without having a shop. For apparels, a shop is needed as u still need a shop for people to come and try.
Let's not compare the interest rates in China to USA and Singapore. China is a totally different environment from USA and Singapore, all right?
As for your question on bond issue, I dun want to go too detail into it. But all I want to say is they do have plans in place. so if they dare to borrow at that rate, they definitely have a way to put the money to work and make sure the profits beat the interests. We just watch n see what the company plans to do, ok.
momoeagle, regarding your point that China products don' sell, this is my response.
Almost everything in the world now is manufactured in China. What is important is how the company does the marketing, build the brand and how your design differentiates. Even German automakers are setting up their car plants in China. So, Made in China product don't sell? I don't think. Even adidas sportswear are also made in China lol.
The question to ask is this: "are there any menswear you know marketing their apparels as "新英伦时尚美学的高级男装品牌"?
Was watching the channel 8 9 pm show by Julie ad Bryan Wong. There are people willing to pay few hundred dollars for David Gan or Eddy Lee for a haircut design. so, if a company can create a good design differentiation, it can also be the David Gan version in the apparel industry. As what bryan wong said, a good hair design has life. A good apparel design also has life.
Guys, no hard feelings. Cheers.