Since 2006 SGH have reported aggregate revenues of $2179m
Since 2006 SGH have reported cash receipts of $2001m
Therefore on average WIP and other revenue items are approx 8.5% of cash received. That has been consistent throughout its period of operation.
Does that suggest a company that has manipulated its revenues to generate profit?
Anecdotally, putting aside the issue of whether agree or disagree with the accrual concept of WIP - would it seem reasonable that in the course of a financial year approx 10% of revenue is on the way to completion but not yet settled? History shows it comes in as cash the following year.
Keep in mind that approx 10% has been relatively consistent, not growing out of control.
Each to make up their own mind. The reported figures do not suggest a company built on phantom revenues.
I accept today is about the future. However, many seem to want to push the SGH is built on a house of cards theme.
SGH Price at posting:
79.0¢ Sentiment: Buy Disclosure: Held
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