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

To: The Phoenix who wrote (46091)	1/5/2001 11:02:44 PM
From: Stock Farmer	Read Replies (1) \| Respond to of 77400

Hi Gary - not sure what you mean. When I said I didn't know where the money was going, I meant that I haven't got a clue which manager is spending how many million on components to build inventory that is getting written off. Or whether floor wax got more expensive or whether everyone got a big fat raise. Macroscopicly, it is clear that if it wasn't for the stock option tax benefit, YoY growth in cash FROM OPERATIONS for FY 2000 would have been paltry. That is a problem you just can't brush off. Generating cash is what the business is all about, and it shouldn't depend so much on the stock price! The situation is worsening. From the 10K FY2000 YoY change 1999-2000 incl Option Benefit: 1.8 B$ YoY change 1999-2000 excl Option Benefit: 0.16 B$ From the 10Q 1Q2001 YoY change 1Q00-1Q01 incl Option Benefit: 0.23 B$ YoY change 1Q00-1Q01 excl Option Benefit: (0.36) B$ In essence, more and more the positive cash flow from operations depends on the option benefit. Where is the cash going? Into the operations of the business. That's the definition! It's all described in the 10K. Go look for yourself. One thing you can be very sure about is that it is NOT because of funds diverted to acquisition, nor is it due to non-cash charges like in-process R&D or depreciation or amortization of goodwill or any of that. It is due to the combined effect of 13 other different adjustments which are itemized and described in the 10K or the 10Q. It isn't that any one of these is a problem, it is how they behave in concert. I have a great deal of understanding how these numbers work. I don't need to "find my answers", to note that the continued increase in CSCO stock price is absolutely fundamental to the growth of the business. Undeniable. John.