NAWLA survey shows huge risks taken by wholesalers

Members of National-American Wholesale Lumber Association are investins more than $300 million in inventories and accounts receivable in the process of increasing their sales volume to more than $1.4 billion, according to a nationwide NAWLA survey just completed.

In the five-year period between 1962 and 1967, member accounts receivable jumped 34/o to $I77 million on any given day, reflecting the amount of the credit risk assumed by the independent wholesaler. Furthermore, the average age of receivables increased from 3I days to 36 days during the same period.

Considering the present minimum 6r/z% interest cost on borrowed money as related to a 46-day average delay in cash flow (delay in cash flow averages 10 days more than the average age of accounts receivable), the financing factor of a sale at $100 per thousand board feet of lumber