The Motley Fool Previous Page


Are Shorts Watching This Number at PPG Industries?

http://www.fool.com/investing/general/2012/06/21/are-shorts-watching-this-number-at-ppg-industries.aspx

Seth Jayson
June 21, 2012

There's no foolproof way to know the future for PPG Industries (NYSE: PPG  ) or any other company. However, certain clues may help you see potential stumbles before they happen -- and before your stock craters as a result.

A cloudy crystal ball
In this series, we use accounts receivable and days sales outstanding 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 -- the number of 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 ac