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Technology Stocks : Cisco Systems, Inc. (CSCO)

CSCO 76.07

-1.1%

3:59 PM EST

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To: Don Lloyd who wrote (64556)	9/15/2003 2:02:16 AM
From: PerryA	Read Replies (1) of 77400

A company that shows an annual loss of $10M on its P&L statement, no matter from where its expenses come from, would be expected to eventually run out money completely, depending on how much money it started with. However, this is not true for the non-cash compensation expense, as it adds money every year. Your comment actually highlights the distinction between financing and operating activity. The ability to finance losses is worth distinguishing from an inability to finance losses. Expensing options would not affect the cash flow statement that shows an ability to finance operating losses. Regards, PerryA

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