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Technology Stocks : Cisco Systems, Inc. (CSCO)
CSCO 86.28-0.5%Feb 10 3:59 PM EST
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To: RetiredNow who wrote (55703)9/27/2001 3:16:41 PM
From: Stock Farmer  Read Replies (2) of 77400
 
Mindmeld - on Cisco's asset base.

Once again you are looking at only one side of the ledger.

You are forgetting liabilities. Particularly current liabilities. Cisco has 8 B$ of these kicking around. Another tidbit you may not have noticed is that while revenue went up 3.3 B$, Current liabilities went up 3.0 B$ - again, can't have forgotten enough from your days as a CPA to realize out what that means.

Anyway, current assets minus inventories minus current liabilities is all that's left of cash and ST investments. Which comes to 3.1 B$

That leaves LT investments plus cash flow. LT investments is 10.3 B$ so the total liquifiable asset on disposition is 13.4 B$, not the rock solid 18 B$ you claim. And 60-70% of of that is corporate equities and corporate bonds.

Subtract 3 B$ in stock buyback (if they even do that), package up the other gooey assets at a generous $0.10 on the dollar and maybe you have about $2.50/share in tangible book value. Tops.

And Free Cash Flow is negative. Cash flow was positive, but it's not sustainable. I can address that in detail if you'd like in a later post.

Not enough to break the bank any time soon. But not like you're going to see tangible book value zoom up any time soon. I urge caution.

If you can hang on I'm almost done formatting my analysis of Cisco. It's not simple this year.

I think I'll dish out pieces.

John.
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