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Strategies & Market Trends : MDA - Market Direction Analysis
SPY 690.310.0%Dec 26 4:00 PM EST
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To: Haim R. Branisteanu who wrote (57927)8/9/2000 5:34:54 AM
From: WhatsUpWithThat  Read Replies (1) of 99985
 
Haim, your profile says you're in Corporate Finance. Yet some of the fundamentals of accounting are missing from your posts?

If you look at CSCO's gross margins, they grew very nearly as much as revenues...which means they didn't sell their products cheaper to increase sales. In fact, selling expenses grew in lockstep with revenues, too. Gross margins dropped a bit - from 64.5% to 64% - and for some reason their GA expenses grew out of proportion, 72% (all figures Q4 2000 over Q4 1999).

You keep coming back to the balance sheet. You note $9 billion in undefined assets...yet in an NR, do you expect the details you'll find in a full quarterly report? There's no F/S notes, no Statement of Changes, etc. that would explain more about these assets.

You mention an increase in AP and these undefined assets as a partial explanation for the decrease in operating profits as you define them...but balance sheet items like an increase in AP and an increase in assets are a cash flow item, not a profit item. I can suffer a huge decrease in my net income without affecting my accounts payable by dollar one...or I can increase my accounts payable without making a single dollar more in profit. They're not related (not counting any interest income or expense on the change in cash balance in your short term accounts).

I don't want to get into an ongoing disagreement with you - I, and I'm sure you, have better things to spend time on - but I'm nonplussed.

Regards
WUWT
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