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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Sanjay Mazumdar who wrote (87604)	12/27/2000 10:49:06 AM
From: accountclosed	Read Replies (2) \| Respond to of 132070

i suppose if you are on fifo inventory you could have negative cost of goods sold since cgs = purchases + beginning inventory - ending inventory. if you don't buy/sell much and the inventory on hand appreciated due to rising prices, cgs could be negative.

To: Sanjay Mazumdar who wrote (87604)	12/27/2000 12:40:47 PM
From: Knighty Tin	Respond to of 132070

SM, There are many ways to achieve a negative cost of sales. One way is to pay this year's cost of sales with last year's revenues. Of course, you need fairly myopic accountants to get away with that one. Another way is to reduce cost of sales with one time windfall items. Many tech cos. do this, though I haven't seen COS go negative before. This scam did add mightily to the reported lies, er, eps of many large tech firms over the past 7 years or so. I don't know AKAM, so I can't specifically comment on them. But I would get the 10K and read management's discussion of cost of sales in the back of the book. It could be very informative.