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Technology Stocks : Cisco Systems, Inc. (CSCO)
CSCO 75.19-0.1%Jan 16 3:59 PM EST

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To: Stock Farmer who wrote (58506)3/14/2002 8:02:24 AM
From: GVTucker  Read Replies (1) of 77400
 
Just to stick my nose in on the working capital debate....

I like to use changes in working capital to see trends in the underlying business that might not yet be captured in the income statement. In Cisco's case, A/R and inventory had begun to rise during 2000 prior to the any impact on the bottom line. Similarly, as things have stabilized recently, this trend has reversed.

When I look at the cash flows that a company's operations can generate, though, changes in A/R and inventory (as well as other noncash current assets and liabilities) are irrelevant to me.
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