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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: SouthFloridaGuy who wrote (59167)	5/1/2002 12:43:43 PM
From: RetiredNow	Read Replies (3) of 77400

Hi NYCBoy, true there is more debt today, but I'd like to see the other side of the equation. To say we have more debt without telling us how much more assets really doesn't tell us anything. For instance, if you were to say in 1990, debt as a percentage of assets was 20% and today it is 50%, that would be an alarming trend. But to say there was $1 trillion debt in 1990 and now there's $2 trillion doesn't tell much at all. Another way to look at it is that all growing companies will experience and increase in current debt as they grow. That's just the nature of the beast. When sales increase, so do the current accounts. Another common trend is for long term debt to increase to fund growth. Sometimes it's stock dilution that grows to fund sales growth. So bottom line, how does the debt to asset trend look over the last decade? That will tell us whether we're in hot water or not. P.S. I have a truck load more in debt than I did in 1990, but my net worth is 10 times what it was in 1990. So I don't mind the debt (and no it's not margin or any other high risk debt, rather it's house and car loans).

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