When I made a presentation in Q3 of 2011 to a group of executives from randomly selected tech companies and said this is exactly what you see lies ahead and a few of these companies will either disappear, go out of business or will have to radically change the game. Their question was how did you figure out all of this. I said simple. Look at this slide from MorningStar public data on Cash Conversion Cycle, Stock Turns, etc. and you really know that their business models are either working or not.
Fast forward 2013, take a look at these companies and you can see the ones that are really in trouble today were the same in 2011 based on these fundamentals 101 metrics! Wow now that is pretty fundamental isn’t it?