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Technology Stocks : Westell WSTL

WSTL 6.020

+0.3%

Nov 28 9:30 AM EST

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To: Sir Auric Goldfinger who wrote (20062)	8/16/2000 1:09:54 PM
From: BWAC	of 21342

You are correct Cash did decrease 14 Million or so. Now can you tell us where it went? Can you explain how it was spent? Can you point out what business functions the cash has been used in? Did anyone invest in WSTL for them to accumulate cash and not use cash to conduct their business plan? Where did the cash go? It was used in operations. Explained as follows: --------------------------------------------- Cash flow was negative $14 Million. What caused that? What business factors led to this? What specific line items may have skewed the result or presented an unclear picture to anyone who just looked at the bottom line? Revenues more than doubled form the March Quarter to the June Quarter. Correspondingly you would expect a large ramp up in Accounts Receivable, Inventory, Account Payable, and quite possibly some sort of purchases of Equipment. All these would effect the final cash flow number until the growth is normalized and leveled off. The increase in Accounts Receivable explained 38 Million of the negative cash flow. Cash hasn't flowed in yet, its still receivable. Get it? Sales just ramped, until payment is received cash is used up. The increase in Inventory explained another 12 Million of the negative cash flow. Sales ramped, ongoing inventory does too. This uses cash, until it is sold. -------------------------------------------------- Again I implore you to seek an accounting degree to supplement your broker designation. It will definitely enhance your understanding of financial statements and allow you to cut through the absolute baloney that posters (such as you) spew forth.

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