cimatron ltd phần 4 pptx

Our trade receivables, net of allowance for doubtful accounts on December 31, 2006 totaled $4.8 million, compared to $4.5 million on December 31, 2005. The increase

was due to higher sales in 2006. The collection cycle remained unchanged during 2006 compared to 2005. We believe that, generally, the quality of receivables remained

unchanged and we will continue our efforts to shorten the collection cycle.

Our capital expenditures for 2006 amounted to approximately $0.5 million and were mostly for the purchase of computers, computer equipment and other office

equipment.

Concentration of credit risk.

Financial instruments that potentially subject us to concentration of credit risk consist principally of cash and cash equivalents, short-term investments and accounts

receivable. Our cash and cash equivalents, short-term investments and long-term investments are invested in deposits with major banks in the United States, Europe and Israel.

We believe that the financial institutions holding our cash funds are financially sound, and that minimal credit risk exists with respect to our marketable securities, which consist

of debt securities of the Government of Israel and highly rated corporate bonds. Our accounts receivable are generated from a large number of customers located in Europe,

Asia, the United States and Israel. We perform ongoing evaluations of our accounts receivable and maintain an allowance for doubtful accounts that we believe is adequate to

cover all anticipated losses with respect to our accounts

Impact of Inflation and Devaluation on Results of Operations, Liabilities and Assets

Although part of our revenues are denominated and paid in U.S. dollars, the majority are not so denominated and paid. Therefore we believe that inflation and fluctuations

in the U.S. dollar exchange rate may have a material effect on our revenue. The cost of our Israel operations, as expressed in U.S. dollars, is influenced by the extent to which

any increase in the rate of inflation in Israel is not offset (or is offset on a lagging basis) by a devaluation of the NIS in relation to the U.S. dollar.

The exchange rate between NIS and the U.S. dollar has fluctuated during the past six months (December 2006 – May 2007) from a low of NIS 3.932 to the dollar to a high

of NIS 4.26 to the dollar. The high and low exchange rates between the NIS and U.S. dollar during the six most recent months, as published by the Bank of Israel, were as

follows:

38

MONTH LOW 1 U.S. dollar = HIGH 1 U.S. dollar =

December 2006 4.176 4.234

January 2007 4.187 4.260

February 2007 4.183 4.254

March 2007 4.155 4.222

April 2007 4.014 4.135

May 2007 3.932 4.065