While investigating the status of current collections and day sales outstanding (DSO) indicators of the big Pharmaceutical and Medical related industries for companies like Merck, J&J, Medtronic, Boston Scientific, St Jude and Abbot Labs(to name a few) we found that the problem might be a little heavier than expected. This must be causing lots of headaches among CEO's and CFO's of these entities trying to minimize their exposure. In the blog sphere there is very little information to ascertain whether DSO's are rampantly increasing or not. Most likely their impact is embedded within the overall numbers. These entities are so invested in above areas that we find it difficult to believe that the posted numbers are correctly showing reality. Merck states 63 DSO's, Abbot claims 65, Boston 61, Medtronic 84, J&J 62 and St. Jude 91 days. If Greece is not paying, Italy takes about 500+days to collect, Spain is in crisis and Portugal is being voiced as the next one to tumble (not to mention France) is it possible that someone is fuzzing with the numbers?
When you add international sanctions (in the case of Iran) where payment alternatives are hard to find the conclusion is even darker on actual DSO's. How do this companies manage to stay current in these territories?
Different alternatives for big pharmaceutical and medical companies to collect monies owed are simply not possible anymore. Who is financing and at what cost are the DSO's maintained? if larger corporations are struggling to collect, imagine what small companies must be going through. Addressing these issues immediately- as cash inflows aren't coming as they used to- is a MUST for all companies regardless of size. If you are interested in additional information, please let me know.
E-global Solutions. 2011.
All rights reserved. No statement or expression of opinion, or any other matter herein, directly or indirectly, is an offer or the solicitation of an offer to buy or sell the securities or financial instruments mentioned. While we believe the sources of information to be reliable, we in no way represent or guarantee the accuracy of the statements made herein. We do not provide individual investment counseling, act as an investment advisor, or individually advocate the purchase or sale of any security or investment. The publisher, editors and consultants of E-global Solutions Newsletter may actively trade in the investments discussed in this newsletter. They may have substantial positions in the securities recommended and may increase or decrease such positions without notice. Readers should not view this publication as offering personalized legal or investment counseling. Investments recommended in this newsletter should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company in question. Unauthorized reproduction of this newsletter or its contents by Xerography, facsimile, or any other means is illegal and punishable by law. Please note: It is not our intention to send email to anyone who doesn't want it. If you're not sure why you're getting this e-letter, or no longer wish to receive it, get more info here.
