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Technology Stocks : Dell Technologies Inc. -- Ignore unavailable to you. Want to Upgrade?

To: Chuzzlewit who wrote (147616)	11/18/1999 9:35:00 AM
From: Michael G. Potter	Respond to of 176387

Reserves exist because of the accrual basis of accounting. They are used to show correct results for the current period. They appear in the cash flow calculation as a positive to cash when they are established and a negative when they are used (basically just the change in balance sheet balances). Operating cash flow is a good proxy for "actual" earnings as it shows the true receipts and expenditures (restructuring reserves are announced and then paid for, but the cash paid out shows up in subsequent periods). Accounting can be confusing, but the advantage to GAAP is that the standards are published and there is a public framework that it works in. Considering the myriad industries that have to be accounted for, I think that it generally does a good job. Don't forget that the SEC requires and the FASB tell you how to report a cash statement. The goal of the regulations is consistency and transparancy. It takes some effort to did into the numbers, but it takes a significant amount of effort to analyze a company in any other way (market, product, etc.). Michael ps - the company I work for has Cash Flow as a very significant part of the bonus calculation to remind general managers that real earnings are what top management expects.

To: Chuzzlewit who wrote (147616)	12/9/1999 10:23:00 PM
From: Sr K	Respond to of 176387

OT TYC 3 weeks ago: <<Continuing with accounting comments, Tyco's CEO LDK can go on financial programs every day arguing that TYC's accounting is GAAP and legit, but the good analysts can see that taking one-time supersized writeoffs at the time of an acquisition (or amortizing over an unreasonably long period) distorts future reported earnings. I do not follow TYC, but I'm quite sure that your follow the cash approach would be revealing. >> <TYC is another story. There is very strong operating cash flow at TYC, and as more buy side analysts discover this I expect the stock will soon be back to its old highs.> What do you think of TYC now? LDK sold 3.4 million opton-exercised shares for about $50 (split adjusted) in late July. As I see it, options are heads (price rise) I win, tails (repricing) I win, and otherwise, tails I don't lose. Back on I exercised my puts and bought Dell back at $41.50 when it didn't break $40 again, and rallied, and am out now.