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Technology Stocks : Dell Technologies Inc.
DELL 122.55+4.4%Nov 21 9:30 AM EST

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To: Eddie Kim who wrote (39171)4/27/1998 3:09:00 PM
From: Chuzzlewit  Read Replies (3) of 176387
 
Eddie, this is very simple. First, how do you know they are getting money for it (that's quite an assumption)? One of the clues to stuffing a channel is an increase in account receivable, because there is generally a buy-back agreement that exists between the vendor and the channel. Profits depend on revenues, but revenues are not equivalent to cash. That's why an astute analyst watches cash flow very closely. When profits run much higher than cash flow, and there is no reasonable explanation for the difference it is time to start being a detective.

It might profit you (or at least cash flow you <VBG>) to read about some accounting conventions -- in particular issues associated with revenue recognition. Just bear in mind that profit is a fiction created by accountants!

TTFN,
CTC
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