Forum Archive Index - February 2002

["Desmond McDonnell" <desmondo@labyrinth.net.au>]

Good fundamental analysis! By now though the shares, falling on 
volume, are already down by almost 50%. That is not to say they won't 
go lower. So what were the early warning signs that insiders and, dare I 
say it, technical analysts perceived?

After reviewing the VTL half year report I noted some interesting 
numbers / ratio's;

As per the half year report, profit improved from $1.2m to $1.8m. If you 
removed the ($926k) tax credit the profit drops to $874k.
Gross Margin has decreased from 30.9% in 03/01 to 22.5% in 09/01
Profitability (Net Profit After Tax / Sales) decreased from 37.4% to 
22.5%
Accounts Receivable has increased from 55 to 70 days (I'd imagine 
there are a few upset suppliers out there)
Accounts Payable has decreased from 78 to 55 days (paying money out 
quicker than receiving it??)
Inventory slowdown (Inventory / Cost of Goods Sold) has increased 
from 54 to 63.3 days (i.e. taking longer to move stock)

I'm sure there are a 100 good reasons for explaining the above, there 
always are! IMHO, it has taken on a lot of stock and is taking too long 
to move it and be paid.

Beware those companies with slow stock turn-around and troubles 
making and receiving payments (CSG comes to mind)!



Geoff (ex-VTL shareholder, bailed out today)

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