Mongrel, I'm not sure of the exact way these arrangements work (with new car stock) - I am guessing it is more like a consignment basis than actual debt; a retailer generally has to purchase and then resell, thus they hold a true liability for their inventory. I would think that (due to the cost of the inventory) the arrangement between a retailer and a manufacturer would be different, and would perhaps only result in a payment on sale of that inventory.
I would guess, though, that they would still have to show that liability on their books, as they would hold responsibility for the merchandise, and the entry of the debt into their books would enable them to enter the asset.
As you can see, I am not an accountant .... I just worked through the same questions you are when I first invested, and really had trouble defining the answer. When I spoke to one of the finance guys at AHG .... he sprayed out a mountain of info, of which I absorbed about 4% .... the above is what I distilled out of it.
AHG Price at posting:
$4.35 Sentiment: Hold Disclosure: Held
.... I just worked through the same questions you are when I first invested, and really had trouble defining the answer. When I spoke to one of the finance guys at AHG .... he sprayed out a mountain of info, of which I absorbed about 4% .... the above is what I distilled out of it.
