David, Cascade's DSO was 70, not 88. USRX DSO is 88. Also Cisco's DSO was 59, not 69. Ascend's DSO was 52, not 69. These numbers are for the quarter ended Dec. 96. The numbers you have stated for DSO are not correct.
Cascade's prior DSO for the 3rdQ 96 was 46, not 66.
Cascade's after tax margin was 21.2% in the 4th Q 96, 21.5% in the 3rd Q 96, 20.7% in the 2nd Q 96. The numbers you stated for after tax margin are too low and not correct.
I don't know where you got your numbers, but the best source is to listen to the conference call or calculate the numbers from the balance sheet and income statement from the quarterly reports (A/R divided by sales, multiplied by 90 days = DSO).
I would like to point out that the forward looking EPS and growth rate for Ascend that you used is less than many analysts are using. As I recall Montgomery estimates 1997 EPS for Ascend to be $1.55 and others have estimated as high as $1.70. The consensus average five year growth rate is 44% and some analysts think the rate could be higher, as I recall 50% per year or more.
I don't mean to be critical. I think you have the right idea in comparing the balance sheet items, growth rates, EPS and so forth. But I think some people might mistakenly accept every number without looking at each quarterly report to verify that number. I realize you don't have time to do that when you prepare so many tables.
Another good number to look at is return on invested capital. A rolling 12 month average return on invested capital (ROIC) according to one analyst is as follows for Q4 96: Ascend 110%, Cascade 108%, Cisco 151%, Shiva 28%, 3 Com 40%, USRX 37%, Microsoft 161%.
|
