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Technology Stocks : Cisco Systems, Inc. (CSCO)
CSCO 75.17+1.0%2:37 PM EST
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To: RetiredNow who wrote (58544)3/18/2002 1:14:17 PM
From: Stock Farmer  Read Replies (2) of 77400
 
au contraire

There you go again, John, assuming that the gremlins are in my spreadsheet.

Check it out buddy. I showed that even using 20% free cash flow to revenues you should get a present value in single digits, which your gremlins inflated somehow?? And pointed out a few other errors in your methodology. Here's the post, FYI. Message 17205447

So even if your calculation of free cash flow is perfect and we should use 20% of revenues as the number, then we still get a single digit stock price. Sans Gremlins.

Which brings us to the 20% number.

Which is bogus.


Remember that this new spreadsheet was directly a result of using your calculations for free cash flows and popping in 10K numbers. I've already identified one major discrepancy for you, which is that I added back amort of in process R&D and you didn't. I thought FCF defined that all depr and amort should be added back.

You still haven't answered my questions posed to you before about why you think amort should not be added back? Double standard there, John? ;)

Apparently you don't read: Message 17205491

I explained that if we end up adding back in more than was spent then something is very very wrong. Don't you think so?

The reason for adding back in ammortization expense and subtracting capex is to reverse an accounting trick so that we get an accurate picture of what the business is spending today, not polluted by how it spent things in the past.

So it's plainly a big error if the sum of depreciation and ammortization is bigger than the sum of capex.

John
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