Question-and-Answer Session
Operator
(Operator instructions) We will go first to Michael Bertz with Kennedy Capital.
Michael Bertz – Kennedy Capital
Good afternoon gentlemen. Thanks for taking the question. Nice quarter. Just wanted to ask a couple of things across the balance sheet, Howard, so obviously inventories didn't increase as much as revenues, it is great, how should we think about that (inaudible) you think you can keep that as the business continues to pickup?
Howard Hideshima
I think you will historically see us maintain pretty consistent days. We will have spike ups during times of product transition. But we will try to keep it in the historical limits.
Michael Bertz – Kennedy Capital
Can you refresh me where that is Howard?
Howard Hideshima
Sure. You will seeing our DSOs or inventory this quarter was 71 days, previous quarter was about 77 days, prior to that was about 85, about a year ago was about 74.
Michael Bertz – Kennedy Capital
Okay, all right. And similarly obviously the account receivable basically in the same bucket sort of rising at the same level as inventories, about 10% quarter to quarter, it actually looks fairly linear given the revenue coming up quite so much, again same question, your ability to keep that and improve cash flow going forward?
Howard Hideshima
Yes, I believe so. Again, we are seeing improved linearity in our quarters and so again the inability to maintain our DSOs over the span of 30 days.
Michael Bertz – Kennedy Capital
Okay. And so any difference you'd see with the holidays for that?
Howard Hideshima
Typically, if you look back seasonally, you will see that Decembers are fairly strong quarters for the company barring the economic upheaval we just went through. If you go back farther back you will see that December is usually a stronger quarter for the industry and for ourselves.
Michael Bertz – Kennedy Capital
Okay and then moving on to again looking I know Charles you talked about investments in Europe, can you give us some favor on sort of what kind of investments you are making there, what kind of CapEx that might entail, how we might see that layering in over the next several quarters, not necessarily, can you tell me what you think about revenue too if you want but just in terms of what kinds of investments you are going to be making?
Charles Liang
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