Alloy Steel Inc. (fka AYSI)

[ambulance_blues]

Re: I think you should look at the difference in inventory compared to the previous period(s) so that you would see the inventory being built up.

I had considered this method, and I found that there isn't any mathematical correlation between quarterly revenue when you try to apply this theory historically. If you look at past quaters, the variation in finished goods between Q2 and Q3 was usually only around $60k or so. So how can we explain some of those outsized jumps in Q4 revenue, if not for seasonality? Look at FY '07 and FY '04 as perfect examples of this.

I think the only good predictor as to the extent of Q4 outperformance is the % drawdown in finished goods at end of Q4 relative to Q3. But of course, we won't know the extent of the drawdown until the quarter is reported. If someone could tell me, as fact, that the upcoming Q4 will show finished goods dropping off by 70-80%, then I would be tempted to max out the credit cards and bet the farm. But I still think Q4 will be strong just based on seasonality alone.