Does This Mean General Dynamics Will Bomb Next Quarter?

Don't let it get away!

Keep track of the stocks that matter to you.

Help yourself with the Fool's FREE and easy new watchlist service today.

There's no foolproof way to know the future for General Dynamics (NYSE: GD  ) or any other company. However, certain clues may help you see potential stumbles before they happen -- and before your stock craters as a result. Rest assured: Even if you're not monitoring these metrics, short-sellers are.

A cloudy crystal ball
I often use accounts receivable (AR) and days sales outstanding (DSO) to judge a company's current health and future prospects. It's an important step in separating the pretenders from the market's best stocks. Alone, AR (the amount of money owed the company) and DSO (days' worth of sales owed to the company) don't tell you much. However, by considering the trends in AR and DSO, you can sometimes get a window onto the future.

Sometimes, problems with AR or DSO simply indicate a change in the business (like an acquisition), or lax collections. However, if AR grows more quickly than revenue or DSO balloons, that can also suggest a desperate company that's trying to boost sales by giving its customers overly generous payment terms. Or it can indicate that the company sprinted to book a load of sales at the end of the quarter, the way used-car dealers do on the 29th of the month. Sometimes, companies do both.

Why might an upstanding company such as General Dynamics do this? For the same reason any other company might: to make the numbers. Investors don't like revenue shortfalls, and employees don't like reporting them to their superiors.

Is General Dynamics sending any potential warning signs? Take a look at the following chart, which plots revenue growth against AR growth, and DSO:

anImage

Source: Capital IQ, a division of Standard & Poor's. Data is current as of last fully reported fiscal quarter. FQ = fiscal quarter.

The standard way to calculate DSO uses average accounts receivable. I prefer to look at end-of-quarter (EOQ) receivables, but I've plotted both above.

Watching the trends
When that red line (AR growth) crosses above the green line (revenue growth), I know I need to consult the filings. Similarly, a spike in the blue bars (DSO) indicates a trend worth worrying about. As another reality check, it's reasonable to consider what a normal DSO figure might look like in this space.

Source: Capital IQ, a division of Standard & Poor's. DSO calculated from average AR. Data is current as of last fully reported fiscal quarter. LFQ = last fiscal quarter. Dollar figures in millions.

Differences in business models can generate variations in DSO, so don't consider this the final word -- just a way to add some context to the numbers. But let's get back to our original question: Will General Dynamics miss its numbers in the next quarter or two?

I wouldn't be surprised to see trouble ahead. For the last fully reported fiscal quarter, General Dynamics' year-over-year revenue grew by 0.6%, and its AR grew 8.3%. That looks OK, but end-of-quarter DSO increased by 6.5% over the prior-year quarter and by 20.7% versus the most recent quarter. That demands a good explanation. Still, I'm no fortune-teller, and these are just numbers. Investors who put their money on the line always need to dig into the filings for the root causes and draw their own conclusions.

What now?
I use this kind of analysis to figure out which investments I need to watch more closely as I hunt for the market's best returns. However, some investors actively seek out companies on the wrong side of AR trends to sell them short and profit when they eventually fall. Which way would you play this one? Let us know in the comments section below, or keep up with the stocks mentioned in this article by tracking them in our free watchlist service, My Watchlist.

Powered By WizardRSS.com | Full Text RSS Feed | Amazon Plugin | Settlement Statement | WordPress Tutorials

Source: http://www.fool.com/investing/general/2011/05/15/does-this-mean-general-dynamics-will-bomb-next-qua.aspx

debt negotiation companies debt payment calculator debt planner debt ratio calculator

The College Goers Should Consider These Tips to Avoid Financial Deficiencies

[WizardRSS: unable to retrieve full-text content]

The average college debt in US comes to about $20,000 for each individual who is staying away from home to acquire the much needed degree. Even the student debt consolidation strategies do not seem to work much if the monetary obligations are not controlled within time. The rate in which consumer debts have grown in US from the time of recession also reiterates the fact that debts should be eliminated in order to get back control over the finances.

Powered By WizardRSS.com | Full Text RSS Feed | Amazon Plugin | Settlement Statement | WordPress Tutorials

Source: http://ezinearticles.com/6259351

debt freedom canada debt harassment debt help services debt help uk

Walmart Vs Gold - How Will Investors Be Rewarded?

[WizardRSS: unable to retrieve full-text content]

Investors experienced positive returns in virtually every asset class during the first quarter of 2011. Small U.S. stocks led the way with returns exceeding 8%. Emerging international markets were in negative territory for most of the quarter but ended in the black. Large company stocks around the world managed to shrug off the impact of natural disaster and nuclear crisis in Japan, political upheaval in the Middle East, and lots of other bad news, to provide returns in excess of long-term expectations.

Powered By WizardRSS.com | Full Text RSS Feed | Amazon Plugin | Settlement Statement | WordPress Tutorials

Source: http://ezinearticles.com/6270471

family credit counseling federal debt consolidation freedom debt relief scam get debt help

Rachel Maddow Tries To Explain How The Female Body Works... By Comparing Them To Cars?

May well Bad Consumer credit rating Affect Your life?

In reaction towards the recent financial disaster, many loan companies you can find have grown to be more exacting in elongating credit to help you customers. For those who have under excellent credit, it may seem more almost impossible to get an arrangement. Actually, if you have bad credit, it’s extremely important to be additional [...]

Source: http://www.legaldebthelponline.com/2011/05/16/may-well-bad-consumer-credit-rating-affect-your-life/

medical bankruptcy mercers debt michigan debt consolidation military debt consolidation

The Correct Way To Pay Up A Credit Card Speedily

For folks which quite often use a mastercard so as to pay for their living expenses it’s more often than not wise to continuously manage your transfers and the debt for your credit card account. If or when you aren’t attentive, even minor unpaid sums pile up very fast and they may also prove to [...]

Source: http://www.legaldebthelponline.com/2011/05/16/the-correct-way-to-pay-up-a-credit-card-speedily/

best way to pay off debt business debt collection business debt consolidation loan business debt management

Gas Discounts and Diets: More of Your Fuel-Saving Suggestions

Saving on gasIt has been more than two weeks since we asked our readers for their favorite methods for saving money on gas. Since then, gas prices have dropped from their April 29 highs, and analysts expect them to continue a steady, slow decline over the next few weeks.

However, while average prices are retreating from the $4 level, they aren't likely to drop too far, and advice on how to save at the pump will likely remain useful for the foreseeable future.

Our first collection of your gas-saving suggestions looked at methods that drivers can use to cut back on their gas expenditures, and our second piece covered methods for squeezing extra miles out of every tank. This time, we're going to look at discounts and other methods that drivers can use to actually pay less for each gallon of fuel.

Discounts in Aisle Two

As gas prices rose, many retailers began offering discounts to regular customers. "Dave," for example, noted that regional supermarket chain Price Chopper gives him 10 cents off a gallon for every $50 of groceries he buys. At the same time, his local Fastrac gas station saver card "gives me 7 cents [off per] gallon during the week and 10 cents off a gallon on Sunday."

Similarly, "Chetski6" proclaims the wonders of Kroger (KR), noting that it offers 10 cents off per gallon for each $100 dollars a month spent there on food. Since her family spends $400 on groceries monthly, that adds up to $6 on each 15-gallon fill-up.

Indeed, grocery store discounts on gas seem to be widespread, and quite popular with our readers. "Mesamark" in Southern California suggests using Ralph's supermarkets, while "Wjsnavarre" notes that Publix supermarkets (also owned by Kroger) sometimes offer a 20% discount on $50 gas cards.

However, when it comes to cutting expenses, "Katiecjmikey" may hold the record for piling on discounts. She writes that "One of our local grocery stores gives you a 10 cent/gallon discount on Shell gas if you use their customer card after you purchase $100 in groceries. We usually buy $100 worth of groceries in the first three weeks, then get our gas the last week of the month." Additionally, she adds in another discount: "They also give seniors a 10% discount the first Wednesday of the month, so that really helps. FYI, yesterday, I got gas for $3.57/gallon using this method."

Even if your area doesn't have a grocery store or gas station that offers discounts, there are other ways to pay less for gas. "Lpc13" suggests that readers try "off-brand" gas, noting that "it all comes out of the same refineries." Similarly, "Don," a limousine company owner, suggested that readers use Gas Buddy to find the cheapest gas stations in their area. In addition to its great website, the company also offers convenient smartphone apps.

Ears to Ethanol

Some of our readers proclaimed the wonders of blended fuels, notably E85, which is a mix of gasoline and up to 85% fuel-grade ethanol. "Alpelltv" wrote that "I have learned my auto will run very well and maintain the same efficiency if I replace half my gas with E85 ... with E85 over $1.00 less per gallon here, I am saving 50 cents per gallon." Another reader, based in Byron Center, Mich., prefers to use E85 by itself, noting that "I have about a 25% savings by using e85. There is a loss in miles per gallon but an overall reduction in dollars spent."

While ethanol had its defenders, other readers had mixed feelings about fuel blends. "Denny," for example, argued that 100% gasoline increases mpg by 10% to 15% mpg compared to mixed gas/ethanol fuels. "Ethanol has lower heating value than 100% gas. Thus, it takes more to get the same distance," he wrote.

"Neal" was even more emphatic, writing that "I save at the pump by NOT BUYING ETHANOL," and claiming that "ethanol by itself is about 30% less efficient." He went on to argue that ethanol also has negative effects that extend far from the pump: "[E]thanol is produced from corn, which is a food for cattle ... the price of food stuffs go up as the production of ethanol goes up. More forests are destroyed for planting of corn when ethanol is used."

Put Your Car on a Diet

Some readers approach gas savings from a dietary perspective: By controlling their gas purchases, they control their driving. One reader, for example, noted that "I put 30 dollars in my vehicle per week. When it's gone I walk or ride a bicycle." John, on the other hand, took this idea to a frenzied extreme, exclaiming that he always stops pumping when he hits $25: "No matter what the price of gas is, if you just stop at $25, $35, or whatever all the time, the price of gas will never matter!!"

Other readers suggested that pumping patterns could have a major effect on gas consumption. "Lyleva" and "Dvdfrnzwbr" advocate keeping the tank half full, as the reduced weight translates into increased mileage. "Pete" explains it this way: "Gasoline weighs about 6.073 pounds per gallon. On a 14-gallon tank, seven gallons weighs about 42+ pounds. [Only filling the tank halfway] should increase gas mileage by 1 or 2 %."

Other readers argue that keeping the tank full is a better way to cut gas spending. "When gas prices are on the rise, I fill the tank every time I burn a quarter of a tank," writes "James," who claims that "the price always averages out lower."

"GH" echoes this, noting that "when the price at the pump is only going up, it saves to pump more often." "Sfchit" claims that "I definitely get more miles to the tank," although he also admits that part of this is a matter of perception: "the more you don't have to go to the pump the less depressing the current pricing is."

Sfchit's perspective resonated with many readers, who noted that the less they often they're confronted with rising gas prices, the happier they are. For example, "John" of Chantilly, Va., explains why he fills up after using only a quarter of a tank: "Sure, you are paying the same, but in your mind, it's not costing you your first born. I would rather fill my tank for fifteen dollars as opposed to fifty to one hundred."

"Monica" agrees, writing that "The $65 a tank for regular gas really hurts! So for some reason I can deal with half the cost at a time."

Whether you're reducing your pain at the pump through actual decreases in what you pay, or via tricks of perception, it's clear that both manipulated pumping and ethanol can reduce the financial and physical burden of high gas prices.


Powered By WizardRSS.com | Full Text RSS Feed | Amazon Plugin | Settlement Statement | WordPress Tutorials

Source: http://www.dailyfinance.com/2011/05/16/gas-discounts-and-diets-more-of-your-fuel-saving-suggestions/

debt reduction loan debt reduction software debt reduction strategies debt relief grants

Cities Using Collection Agencies For Past Due Trash Payments

[WizardRSS: unable to retrieve full-text content]

Cities all over the United States, both rural small towns and large metro cities, are having issues with collecting monthly payments for performing trash collection duties. The downturn in the economy has reached both private and public service providers, city trash collection is not immune to this and cities are now looking for ways to improve cash flow and allow the service to still be viable for the city residents. Many cities are now using collection agencies to collect from past due accounts and the results so far are positive.

Powered By WizardRSS.com | Full Text RSS Feed | Amazon Plugin | Settlement Statement | WordPress Tutorials

Source: http://ezinearticles.com/5932383

consumer debt settlement consumer debt solutions credit card debt advice credit card debt collection