[TenTec] Tax on Inventory

[Kris Merschrod]

There were many "no subject" subject lines today!  So I'll pick up on a 
thread that is probably crucial for small raido companies in general.

The inventory problem (and I did the first inventory in about fifty years at 
my family company and decided to drop it!)

For those not involved with this issue.  If a company assembles radios but 
does not sell them in that fiscal year, then the value of those unsold rigs 
is considered an accumulated asset and the difference between cost and value 
is taxed.  The same appies to having more, say, inductors in your supply 
room than you had at the beginning of the year.

That keeps folks from squirring away profits in inventories!   Well, you 
would think that this idea would be one of the areas for reform especially 
if you want companies to demand down the line to stimulate the economy.  In 
the longer run, those inventories will eventually be sold and profits made 
(or lost) that then can be taxed.

So this all comes back to the cycle of construction and sales - who wants to 
be stuck at the end of the fiscal year with radios ready to go out the door 
but not sold?  Think of that cash flow problem - you have your working 
capital tied up in radios and now you need to take some of that working 
capital to pay taxes.

I am not crabbing about taxes - that is the pet peeve of the businessman - 
just commenting on the working capital issue.

Kris KM2KM


Merschrod
123 Warren Road
Ithaca, NY 14850
607 - 257-1734
www.merschrod.net
----- Original Message ----- 
From: "Jerry Haigwood" <jerry at w5jh.net>
To: "'Discussion of Ten-Tec Equipment'" <tentec at contesting.com>
Sent: Thursday, September 15, 2011 11:53 PM
Subject: Re: [TenTec] (no subject)


Rick,
   Having run a small company, I can tell you predicting what your sales are
going to be is more of an art than a skill.  Most companies will base their
predicted sales on past sales.  But, many times that is a problem.  I am
sure TenTec is no different than any other company operating today.  All
companies are running really lean.  They do not want to pay a lot of tax on
inventory so they try to get by with the smallest amount of inventory as
possible.  Many times that means they run out of things.  The good companies
still run out but they usually can tell you very accurately when something
will be back in stock.  I am sure all we need to do is call TenTec and they
can tell us when the product will be available again.  Unless, they are
dependent upon some other company that has went belly up or is having
financial problems, I would expect them to be accurate within a day or so.
I like TenTec radios I want them to succeed.  I can't afford their new
radios so I have to wait and buy someone's used radio.  If TenTec goes
under, I lose my source of used radios!  No one will be buying new ones.
Jerry W5JH

-----Original Message-----
From: tentec-bounces at contesting.com [mailto:tentec-bounces at contesting.com]
On Behalf Of Rick - DJ0IP / NJ0IP
Sent: Thursday, September 15, 2011 10:30 PM
To: 'Discussion of Ten-Tec Equipment'
Subject: Re: [TenTec] (no subject)

There's been a lot of speculation.
Here's my own wild guess.

TT is a relatively small company, especially if you just look at their ham
radio business.
The tool up their line and produce just one kind of radio for a specific
length of time.  Perhaps a few weeks.
Then they retool their line and produce another radio.
Then they retool and reproduce the next, etc.

If business peaks on any particular radio which is not currently in the
production run, it's going to be a while until these radios are back in
stock.

So my guess is, marketing's crystal ball may need re-calibrating, but their
business is still healthy.

73
Rick, DJ0IP


-----Original Message-----
From: tentec-bounces at contesting.com [mailto:tentec-bounces at contesting.com]
On Behalf Of matthew martin
Sent: Thursday, September 15, 2011 11:32 PM
To: tentec at contesting.com
Subject: [TenTec] (no subject)

It appears that Ten Tec wants to go out of business. On their web site they
have been out of stock on the Omni 7 for over a month and now they are out
of stock on the Eagle with a tuner. They are forcing hams to buy rice
boxes.
Matt, W8MJM
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