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Technology Stocks : Advanced Micro Devices - Moderated (AMD)
AMD 250.53+0.3%9:30 AM EST

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To: Petz who wrote (85253)7/17/2002 8:18:57 PM
From: Joe NYCRead Replies (2) of 275872
 
Petz,

Take a look at Jon's post: Message 17754058

What is the definition of cost of sales? I think it is generally cost, forget sales. Suppose you make 1 chip at cost of $50 and sell it for $100. Now suppose you make another one but don't sell it, but place it in inventory as finished product. Now, we have sales of $100, cost of sales of $100 (2*50) and increased Inventory asset by $100. But if the inventory number is not real (it can be shifted any way you want by packaging or not packaging die), then you also lose the meaning of cost of sales. Did AMD make only as many parts as they sold, or did they make more. AMD could have made 8M units (after "selling" 8M in Q1, it would be appropriate), sold 6M units, but since the inventory number is fudged, we don't know the real cost of sales.

Anyway, just a theory.

Joe
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