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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 78.32

-0.1%

Jan 30 9:30 AM EST

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To: The Phoenix who wrote (46219)	1/6/2001 2:50:09 PM
From: Monty Lenard	Read Replies (2) of 77400

"CSCO built up raw matierals inventory for hard to get components. THis has been a short term drain on earnings." Gary, under accrual accounting building inventory does not change earnings in and of itself. It can affect earnings if the money to build inventory is borrowed funds through interest expense but other than that it is purely a balance sheet/cash flow event. The same can be said for R&D if it is booked as a balance sheet item then amortized. Only the portion amorized would change earnings. Maybe you are getting a bit confused between balance sheet and income statement items? Monty

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