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To: John Chen who wrote (112920)	12/19/2000 1:34:49 PM
From: Glenn D. Rudolph	Read Replies (1) \| Respond to of 164684

Glenn, what is 'operating cash'? All my cash is operating. Also, I can operate better on more cash. I heard Cisco has 'operating cash' needs reserve, why? Please educate! Thanks in advance. John, This will be quick due to my lack of time. A firm needs a certain amount of cash to meets the needs of their ongoing business. This means, payroll, marketing, etc. Many succesful firms have amassed more cash than is needed for day to day operations so they move that cash into some other form of investment. I use the term reserve for doubtful accounts which we have in my business. This is the same as what Cisco needs. Cisco has already supplied product and service to firms with the plan they will pay Cisco in a timely fashion. Cisco would need those payments to pay their suppliers, payroll, utilities, etc. Cisco is concerned certain customers will not have the cash to pay on time or possibly at all. Cisco removes funds from their investing department to cover their ongoing expenses if these customers fail to pay. Most firms really keep two types of accounts for liquid assets. Operating cash and investment cash. Glenn