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Technology Stocks : How high will Microsoft fly?
MSFT 492.01+1.3%Nov 28 9:30 AM EST
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To: Brian Sullivan who wrote (50447)10/2/2000 10:05:50 PM
From: Dave  Read Replies (3) of 74651
 
I find this fascinating in MSFT's 9/28 10K:

1998 1999 2000
-----------------------------------------------------------------------------------
Unearned revenue 3,268 5,877 6,177
Recognition of unearned revenue from prior periods (1,798) (4,526) (5,600)

Each year, MSFT includes several billion dollars in unearned revenue as necessary
to make their Operating Income number look right, and then the next year they
negate that number by "recognizing" that it was drastically overstated. So
basically, by fudging an appropriate made-up Unearned Revenue number, they can
make their Top-Line revenue increase every year.

This number has to keep increasing to keep their net cash from operations
increasing. Watch for this number to increase even more this quarter. In 2000,
MSFT had to increase their unearned revenue by $2B in order to make their
net cash from operations increase by only about $0.8B.
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