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

To: kvkkc1 who wrote (46206)	1/6/2001 10:48:52 AM
From: Wyätt Gwyön	Read Replies (1) \| Respond to of 77400

Bottom line: Are they doing something illegal or are they acting in accordance with GAAP? knc No, the issue is not about the legality of their reporting. The bottom line is, does the reporting give an accurate picture of what is happening? Is there a better way to derive an accurate picture, so as to determine if an investment at the current price makes sense?

To: kvkkc1 who wrote (46206)	1/6/2001 11:54:16 AM
From: Stock Farmer	Respond to of 77400

Kvkkc1 - I am not suggesting any illegality or impropriety. Perfectly normal stuff all in accordance with GAAP. As to taking stuff out of the statement that supports my argument... it appears that my point is slowly making its way home. There can only be an impact to OPERATING CASH FLOW if the thing you are backing out has an impact on operating cash flow... To see what I mean, try adjusting for depreciation. Oops. You take the debit out of the earnings and take the credit out of the operating cash flow. Drat... Same for In Process R&D. What you are left with are things that affect the business! So if I can back out stock option exercise effects and see a huge impact... you know that stock price affects operating cash flow a big way! It's not some small tidbit. It completely dominates the change in cash flow on a YoY basis! That is a big impact! Sure, you could also say "if CSCO wasn't increasing their inventory then there would be a positive impact on cash flows" and calculate the effect similarly. And so on. Everyone seems to understand that managing inventory is a thing that is important to the cash flow growth of the business. But few people seem to understand that in the case of CSCO, so is their stock price!!!! And not in the "employees will be sad and may go away" kind of way. In a material, bottom line, billion dollar cash kind of way. That is my point. Your suggestion that it is a fallacy is, with all due respect, complete hogwash. John.