SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Technology Stocks : Compaq
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: Salah Mohamed who wrote (77571)2/6/2000 6:14:00 PM
From: Andreas  Read Replies (2) of 97611
 
You're reading the right balance sheet incorrectly.

Although there was an increase in "current liabilities" in the amount you state there was a corresponding increase in "current assets". Specifically, you will notice a new item in the current asset section called "short-term investment". You should also note that when analysts and others in the investment community refer to a particular company being debt free they are referring to "long-term debt". Short-term debt does not count for purposes of describing whether or not a company is debt free since there are short-term assets off-setting and both short term debt and short term assets are components of working capital which entails a different set of conventions for financial health. CPQ does not have long-term debt as of Sept. 30, 99. The more appropriate measure of cpq's short-term position is found in what is often referred to as its "working capital" position as measured by "working capital" (current assets minus current liabilities) and current ratio (current assets divided by current liabilities) and quick ratio (cash and marketable securities divided by current liabilities). These three measurments are typical measurements used to a measure a company's short-term financial health and to compare changes in same.

Finally, I would point out that S&P lowering their rating has virtually nothing to do with cpq's financial position. They did not lower the rating because of any perceived deterioration in cpq's financial position because no material deterioration occured.
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News