Here are my observations after comparing numbers of KRBL and CLSEL.
- Business is WC intensive, particularly on the inventory front.
- Cumulative operating cash flows (Pre-Tax)/operating profit ratio of KRBL is 2x to that of CLSEL’s.
- Unlike CLSEL,
- KRBL writes-off its impaired credit and does not keep any disputed receivables in the aging schedule.
- KRBL products have a pull among customers, inference from the trend of falling DSO.
- KRBL gets better credit terms from its suppliers, inference from DPO.
CLSEL’s accounting for AR, and business terms to customers as well as suppliers are more liberal, resulting in weaker operating CFs.
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