Sino Agro Food Inc (fka SIAF)

[treit2002]

First of all, he should have plenty of cash, assuming that customers have paid their bills by now.

This assumption is wrong. But new policies could boost cash flow.

The business is growing, so on-going a/r can be expected to increase. Customers pay their old bills, but owe more on their new bills. New customers enter the cycle. This is good, because SIAF is selling more.

In fact, the aging report looks quite good. There is no problem with uncollectible debt, and there are very few debts past due, as quoted below from rr85 post.

However, I wonder why SIAF cannot change its standard credit time from 90 says to 60 or even 30 going forward. Over a quarter this would amount to a substantial cash flow benefit, stalling the need for cap ex from new shares; hopefully, until it isn't needed at all.

Companies often offer small discounts for bills paid on time, say 30 days net 2%, to encourage fewer collections and rapid turnaround. If ever there was a case where accelerating cash flow would be positive, this is it.



0 - 30 days: $12,551,746
31 - 90 days: $36,484,545
91 - 120 days: $7,055,652
over 120 days and less than 1 year: $3,788,488
over 1 year: $0

The company did not record any allowance for bad debt and expected all A/R amounts to be collectible:
"The Company has performed an analysis on all of its accounts receivable and determined that all amounts are collectible by the Company. As such, all accounts receivable are reflected as a current asset and no allowance for bad debt has been recorded as of September 30, 2012 and December 31, 2011. Bad debts written off for the nine months ended September 30, 2012 and 2011 are $0." (page F-25)

The standard credit time per the 10-Q is three months. (page F-9)