Spongetech Delivery Systems, Inc. (fka SPNGQ)

[Christy from Google]

Under GAAP, one could handle it two different ways. The sale # would be 1,152,000, OR the Cost of goods would be increased a similiar amount. The gross profit would still net out the same. The discount, or interest, would effect gross profit after Cost of Goods Sold, and not a G&A expense. (full absorption inventory costing)

Be that as it may, the key is a line of credit would only cost 14,000, (7% X 200,000) a savings of $34,000. Which reperesents 2.8% hit to the bottom line. HUGE for a manufacturing company.

So take 2.8% of your likely SPNG sales and you do the math. It's not chump change

At mt my limit Morgan, but the true interest rate (48%, 36% 24% or whatever) is solely dependent on the "AR turnover days" assuming your dicount remains constant.