Analysis of IDCX Accounts Receivables.
Latest IDCX 10K & 10Q prove China's (( temporary )) SEVERE CREDIT CRUNCH, as INDISPUTABLY recognized worldwide!
FROM IDCX DOUBTFUL ACCOUNTS OF $888,844 & NIL TO ((( $5,661,709 ))) PROVES IT!
HEY, YOU GOT SIX MILLION INCOMING DUE YA? ( AND IN LESS THAN THREE MONTHS!!! ) DO YOU, HUH?
"At December 31, 2010 and 2009, the allowance for doubtful accounts was $888,844 and nil, respectively."
"We sometimes extend credit to our customers. Failure to collect the trade receivables or untimely collection could affect our liquidity.
We extend credit to some of our customers while generally requiring no collateral. Generally, our customers will pay within the credit period. Sometimes, due to liquidity of customers, a small portion of the payment will be paid in the extended credit period. We perform ongoing credit evaluations of our customers’ financial condition and generally have no difficulties in collecting our payments. However, if we encounter future problems collecting amounts due from our clients or if we experience delays in the collection of amounts due from our clients, our liquidity could be negatively affected. We believe that we will be able to collect current amounts due from our customers.
Accounts receivable:
Accounts receivables are recorded at net realizable value consisting of the carrying amount less an allowance for uncollectible amounts, as needed.
The Company uses the aging method to estimate the valuation allowance for anticipated uncollectible receivable balances. Under the aging method, bad debt percentages determined by management based on historical experience as well as current economic climate are applied to customers’ balances categorized by the number of months the underlying invoices have remained outstanding. The valuation allowance balance is adjusted to the amount computed as a result of the aging method. When facts subsequently become available to indicate that the allowance provided requires an adjustment, then the adjustment will be classified as a change in estimate.
Seasonality
Our products’ growth is subject to seasonal weather conditions. During the winter our products are mostly dormant.
Loss from flood:
A serious flood raged in North-East China in the third quarter of 2010, destroying hundreds of thousands of people’s homes and led to the destruction of millions of dollars’ worth of crops in the region. During the flood, the Company lost inventory raised in greenhouses and farm chemicals kept in storage which amounted to $449,702 in losses." 10K Endquote.
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COMPARE THESE NUMBERS:
For the Quarterly Period Ended September 30, 2011.
Latest 10Q Accounts receivable:
"Accounts receivable are recognized and carried at the original invoiced amount less an allowance for any uncollectible accounts. The Company uses the aging method to estimate the valuation allowance for anticipated uncollectible receivable balances. Under the aging method, bad debts are estimated by management based on its recent experience as well as the current economic climate and are applied to customers’ balances categorized by the number of months the underlying invoices have remained outstanding. The valuation allowance balance is adjusted to the amount computed as a result of the aging method. When facts subsequently become available to indicate that an adjustment to the allowance should be made, this is recorded as a change in estimate in the current year. As of September 30, 2011 and 2010, the allowance for doubtful accounts amounted to $5,661,709 and $888,844 respectively." Latest 10Q End quote.
NOTE 5 – ACCOUNTS RECEIVABLE
Accounts receivable consist of the following as of:
September 30,
2011
(Unaudited)
December 31,
2010
Accounts receivable
$ 10,637,414 $ 2,280,864
Less: Allowance for doubtful accounts
(5,661,709 ) (888,844 )
Accounts receivable, net
$ 4,975,705 $ 1,392,020
At September 30, 2011, net accounts receivable of $4,975,705 includes $2,327,307 for sales shipments which the Company has the legal right to collect but which management estimates the full accrual method criteria have not been met. These accounts receivable are offset by a credit to deferred sales in the same amount and will be recognized as revenue when the full accrual criteria are met." Latest 10Q End Quote.
"Liquidity and Capital Resources
As of September 30, 2011, we had cash and cash equivalents of $5,633, primarily consisting of cash on hand and demand deposits. The following table provides detailed information about our net cash flow for all financial statement periods presented in this report. To date, we have financed our operations primarily through cash flows from operations and equity contributions by our shareholders.
The following table sets forth a summary of our cash flows for the periods indicated:
Nine Months Ended
September 30,
2011
2010
Net cash (used in) provided by operating activities
$ (3,774,100 ) $ 4,172,565
Net cash provided by (used in) investing activities
3,320,409 (3,634,681 )
Net cash provided by (used in) financing activities
125,351 (411,798 )
Effects of Exchange Rate Change in Cash
93,254 136,661
Net (Decrease) Increase in Cash and Cash Equivalents
(235,086 ) 262,747
Cash and Cash Equivalent at Beginning of the Period
240,719 11,300
Cash and Cash Equivalent at End of the Period
$ 5,633 $ 274,047
Operating activities
Net cash used in operating activities was ($3,774,100) for the nine months ended September 30, 2011, as compared to net cash provided $4,172,565 for the nine months ended September 30, 2010. The change is attributable to the increase of the accounts receivable and deferred cost. The accounts receivable contributed ($8,249,390) to the net cash outflow, and long term growing crops inventories led to ($1,971,950) net cash outflow." Latest 10Q End quote.
THIS IS A START-UP! IF YOU NOW OWN A CORPORATION, YOU'LL UNDERSTAND OWNERSHIP'S PROGRESSION OF UPS & DOWNS WHILE PROGRESSING OVER TIME.
"On August 25, 2010, the Company amended its articles of incorporation to change its name to “North China Horticulture, Inc.”
IDCX WILL SIMPLY REFILE ALL COMPLIANCE WHEN READY/ABLE; (PER China's 'command economy' C.P.C.). THIS ISSUE IS WORLDWIDE. NO WORRIES. 100% CONFIDENCE OF CONVICTION IN IDCX!
