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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 78.03

+0.8%

Nov 14 9:30 AM EST

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To: Dave who wrote (51603)	4/17/2001 2:15:01 PM
From: Jacob Snyder	Read Replies (2) of 77399

re: "Although, they paid for the inventory with cash, writing 2.5B of inventory off the books isn't a cash charge." There is a lot about accounting I don't understand. Is this correct: the 0.8-1.2B for restructuring is a cost they haven't paid yet, and the money for that has to come out of: 1. future cash flow, or 2. cash and investments (=past cash flow that they have saved), or 3. borrowing (fortunately, they haven't started doing this) The 2.5B in inventory write-off is a cost they have or haven't already paid? Does it matter whether the inventory is with CSCO or CSCO's suppliers? The provisions for bad debt is money they haven't paid, and won't have to pay until the debts are actually written off? They just move the money out of the "profit" catagory, and put it into "bad debt provision" catagory, and leave it there till the debts are paid or defaulted? TIA.

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