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Technology Stocks : Compaq -- Ignore unavailable to you. Want to Upgrade?

To: Piotr Koziol who wrote (83784)	7/26/2000 2:44:30 PM
From: marquis103	Read Replies (3) \| Respond to of 97611

Cash Conversion Cycle. Found this on the web. I think it's much more relevant for companies with cash on hand problems, which obviously doesn't fit the Compaq situation at all. Certainly this cycle is important because the quicker you convert to cash (turnover your cash), the more your money can earn, and theoretically you should have to borrow less. But if you're having component shortages, you need to build Raw Materials inventory to guard against a stock out and this would hurt a cash poor company. Also, the longer it takes you to get a product through production, the less times your cash turns over. Improving cash conversion is undeniably an added positive, but I think this is just one more case of somebody trying to find a reason to continue disliking a stock that's been everyone's whipping boy for awhile. Also, I think the column headings for Margin and cycle were reversed in the table the Motley Fool presented. Russ "cash cycle: The length of time between the purchase of raw materials and the collection of accounts receivable generated in the sale of the final product. also called cash conversion cycle. "