I read an article this morning that talked about Logitech. John Hempton of Bronte Capital is puzzled why they are still in business, what with the new crop of devices not needing much in the way of peripherals (Android phones, tablets, et al).
He forgot that there are something like a quarter of a billion desktop computers still sold each year, and that peripherals wear out (I recently got a new, $100 Logitech keyboard), and that aunts and uncles need to buy gifts for their computer-using relatives, and that for some people shopping is a form of raising self-esteem. Also, he seemed unaware that Logitech has two high-end lines, 3dconnexion and Harmony.
Despite the author's concern about the future for Logitech, his most interesting point (to me, anyhow) was Payables. Apparently Logitech is at 90 days, meaning they take an average of 90 days to pay their bills. This is seen as borrowing a free loan from suppliers. ("Suppliers" means the companies in China who manufacture the goods sold by electronics companies.) It also means possibly getting into trouble when suppliers get angry about being paid so late. (Would you want to wait three months for your paycheque?) Apple is nearly as bad, but they can afford to be bullies right now. And Cisco is the best, at just 20 days.
The writer found that Dell has steadily been increasing payables over the years. This is another way to make profits look better than they are, because the company each year puts off paying more debts.
Turning to CAD vendors, we see that Autodesk has increases the amount payables during the year:
- January (2010): $259.4 million
- April: $240.4 million
- July: $268.9 million
- October: $304.7 million
But decreases them annually:
- 2007: $345.8 million
- 2008: $309.2 million
- 2009: $259.4 million
- 2010: not yet available
PTC and Dassault are similar.