Note G - Fair Value Measurements

9 Months Ended

Jan. 31, 2012

Fair Value Disclosures [Text Block]

G – Fair Value Measurements

The table below summarizes information about the fair value of financial instruments included in the Company’s financial statements at January 31, 2012 and April 30, 2011:

	January 31, 2012				April 30, 2011
	Carrying		Fair		Carrying		Fair
(In thousands)	Value		Value		Value		Value
Cash	$	409	$	409	$	223	$	223
Finance receivables, net		253,645		201,471		222,305		176,549
Accounts payable		7,232		7,232		7,742		7,742
Revolving credit facilities		83,873		83,873		47,539		47,539

Because no market exists for certain of the Company’s financial instruments, fair value estimates are based on judgments and estimates regarding yield expectations of investors, credit risk and other risk characteristics, including interest rate and prepayment risk.  These estimates are subjective in nature and involve uncertainties and matters of judgment and therefore cannot be determined with precision.  Changes in assumptions could significantly affect these estimates.  The methodology and assumptions utilized to estimate the fair value of the Company’s financial instruments are as follows:

Financial Instrument	Valuation Methodology
Cash	The carrying amount is considered to be a reasonable estimate of fair value due to the short-term nature of the financial instrument.
Finance receivables, net	The Company estimated the fair value of its receivables at what a third party purchaser might be willing to pay. The Company has had discussions with third parties and has bought and sold portfolios, and has had a third party appraisal that indicates a 37.5% discount to face would be a reasonable fair value in a negotiated third party transaction.  The sale of finance receivables from Car-Mart of Arkansas to Colonial is at a 37.5% discount. For financial reporting purposes these sale transactions are eliminated. Since the Company does not intend to offer the receivables for sale to an outside third party, the expectation is that the book value at January 31, 2012, will be ultimately collected. By collecting the accounts internally the Company expects to realize more than a third party purchaser would expect to collect with a servicing requirement and a profit margin included.
Accounts payable	The carrying amount is considered to be a reasonable estimate of fair value due to the short-term nature of the financial instrument.
Revolving credit facilities	The fair value approximates carrying value due to the variable interest rates charged on the borrowings, which reprice frequently.