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Technology Stocks : Apple Inc.

AAPL 255.48

-1.1%

Jan 16 3:59 PM EST

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To: Alomex who wrote (18660)	9/29/1998 6:14:00 PM
From: rhet0ric	Read Replies (1) of 213182

It is just that you consider cost only as "adm. cost" whereas to me cost cutting means chopping everything from R&D to the specific cost of manufacturing a system as compared to the price (aka. margin). I'm not an accountant, so I might well be using "cost" in a nonstandard way I believe that your method is non-standard for manufacturing companies, which separate product cost from operating cost. The standard proft and loss statement for a manufacturing company looks like this: Sales revenue AAAAAA.AA Cost of goods sold BBBBBB.BB _________ Gross Margin CCCCCC.CC Operating Expenses DDDDDD.DD ========= Operating Profit EEEEEE.EE Gross margin is A less B. Operating profit is C less D. In a nutshell, Eric is analyzing Apple's numbers in the standard way, and you in a non-standard way. I've noticed, for instance, that you talk about the $100M in advertising costing $50 per iMac or whatever. But in standard accounting, the $100M would show up in operating expenses, not manufacturing (cost of goods sold). rhet0ric

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