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Technology Stocks : Cisco Systems, Inc. (CSCO) -- Ignore unavailable to you. Want to Upgrade?

To: FESHBACH_DISCIPLE who wrote (42897)	11/7/2000 11:33:34 AM
From: The Phoenix	Read Replies (1) \| Respond to of 77400

FESH, Here's your formula (below). (This is really ridiculous I can't believe you really think this has any foundation) Both scenarios have the same revenue, same begining inventory, same purchases... the only difference is ending inventory - which means CSCO would sell more inventory off but get no incremental revenue from it. Of course margins are lower in this case - like DUH! Please tell me I'm missing something because if I'm not then I think our discussion can end here. Please tell me why CSCO would sell more inventory and get no revenue from it. You actually elude to the fact that CSCO adjusts/manipulates inventories to generate gross profit. This is ludicrous. If you really believe that then you have spent no time running any business... not even a coffee shop. OG **************** SALES 6,519 COST OF SALES CALCULATION: BEGINNING INVENTORY 1,232 JULY 29,2000 PURCHASES 3,102 =COST OF GOODS AVAILABLE 4,334 LESS:ENDING INVENTORY 1,956 OCT 28,2000 COST OF GOODS SOLD 2,378 GROSS PROFIT 63.5% 4,141 REPORTED BY CISCO Now if inventory grows 15% instead of 58% this is what gross profit looks like: Sales 6,519 Beginning inventory 1,232 +purchases 3,102 =cost of goods available 4,334 -Ending inventory 1,416 PLAY WITH THIS NUMBER =cost of goods sold 2,918 Gross profit 55.2% 3,601 REPORTED BY THE DISCIPLE VOILA MAGIC !! Just change the ending inventory higher and your profits are whatever you want them to do.