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Technology Stocks : Dell Technologies Inc.

DELL 124.39

-7.0%

10:40 AM EST

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To: jim kelley who wrote (105566)	2/27/1999 4:25:00 PM
From: Chuzzlewit	Read Replies (2) of 176387

Jim, here's a radical suggestion. Start with the tax rate and work backwards. Why did taxes drop from 26% to 18.6%? Probable answer: because taxable income dropped! Remember, there is a different set of rules governing taxes than those governing SEC reporting. What I am really suggesting is that if you take the 26% tax rate as a baseline, then the 18.6% rate is most likely due to a relative over-reporting of income (and probably due to over-reporting revenues as in channel stuffing). How much over-reporting of income? Well, cynic that I am tells me that it is by as much as 39.79%. [26/18.6 -1 = .39785] But then again, what do I know? Here's something else to look at: how much cash did Compaq actually pay. This is not a provision for income taxes which assumes away timing differences and aggressive accounting. I am talking cold, hard cash - lucre, coin of the realm. TTFN, CTC

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