Oh my, it is true the lengths people will go to in an attempt to drive down the share price of a stock.
Since I interpret 10Qs and Ks for a living, let me try and clear this one up.
Without getting too technical, which I would be happy to if anyone would like to know about Days Sales Outstanding (DSO), and how that relates to A/R, for now let's to one simple comparison.
In November 2008, revenue/sales for the six-month period was $17.9M, with A/R at $10.8M.
In February 2009, rev/sales for nine-month period stood at $31M, with A/R at $14M.
Quite impressive, actually, that sales increased by $14M in 3 months and A/R only rose $3.2M. There's not a company around that wouldn't love that A/R turnover quarter-over-quarter.
Now, for the Revenue Recognition. That had me stumped until I actually read that portion of the 10Q. A company should not recognize P.O.s, only shipped product. So I decided to investigate a little.
What the (im)poster failed to do was reveal the entire paragraph in both cases:
"Sales and services are recorded when products are delivered to the customers. Provision for discounts, estimated returns and allowances, and other adjustments are provided for in the same period the related sales are recorded. In instances where products are configured to customer requirements, revenue is recorded upon the successful completion of the Company’s final test procedures."
Very much in line with any manufacturing company. Anytime a customer asks for options (which I think would be rare for Spongetech), a quality inspection is performed, at which time revenue is recorded and product shipped.
As far as recognizing P.O.s, again, the entire paragraph must be read to interpret it correctly.
"During the three and six months ended November 30, 2008 we had sales of $12,341,737 and $17,886,356, respectively, as compared to sales of $278,976 and $343,052 during the three and six months ended November 30, 2007. Management attributes this change primarily to increased sales from international customers. In addition we began making shipments to retail outlets and distributors to domestic companies and anticipate increased sales domestically. Also, we anticipate sales in connection with our Puddle Pal’s Children Sponge which was launched on November 25, 2008 and also sales of our Uncle Norman’s Pet Sponge which we launched on July 11, 2008. To date we have received purchase orders of $4.7 million for Puddle Pal’s Children’s Sponge products and $6.4 million for Uncle Norman’s Pet Sponge products."
What this tells us is that, IN ADDITION TO sales, they also had received purchase orders, which will amount to future recorded sales.
I don't really think the person posting this would like to debate the subject, but I am available if a discussion for clarity purposes is needed.
News 
Market Data 
Discover 
AI
