Bloated A/R can be bad to. So, I guess I can agree that if we're not allowed to count A/R, Inventory, or Property & Equipment, their balance sheet looks pretty bad.
I don't think anyone here disputes the fact that assets would be discounted in a liquidation. Given that possibility, I think the bulls here would suggest that, whatever the context, the balance sheet has stuff on it that make it better than if that stuff wasn't on it, even if that stuff wouldn't be worth as much in a fire sale.
So, in a liquidation or buy out, there is more of a possibility that there will be something left for shareholders than one frequently finds in troubled companies, and if revenues turn around or even stabilize, and liquidation ceases to be as much of a concern as it is now, the upside is much greater because there is a positive tangible worth to build on instead of a mountain of liabilities to pay off.
We all know we can quibble about the numbers, but that position seems pretty straightforward. You may find it naive & I'm happy to allow you that opinion. I hope you were shorting those shares I bought so we can both have the pleasure of experiencing the consequences of our ideas.