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

To: The Phoenix who wrote (46219)1/6/2001 2:50:09 PM
From: Monty Lenard  Read Replies (2) | Respond to of 77400
 
"CSCO built up raw matierals inventory for hard to get components. THis has been a short term drain on earnings."

Gary, under accrual accounting building inventory does not change earnings in and of itself. It can affect earnings if the money to build inventory is borrowed funds through interest expense but other than that it is purely a balance sheet/cash flow event.

The same can be said for R&D if it is booked as a balance sheet item then amortized. Only the portion amorized would change earnings.

Maybe you are getting a bit confused between balance sheet and income statement items?

Monty



To: The Phoenix who wrote (46219)1/6/2001 7:33:18 PM
From: Stock Farmer  Read Replies (1) | Respond to of 77400
 
Ok Gary.... too much to digest,

I'm not saying the company won't grow. I'm saying that the company is relying very heavily on the cash flow from option exercise. More heavily than anybody seems to want to admit.

Sure it might be temporary. I'll give you that... but it's not trending in that direction at all. It has been steadily trending towards less and less temporary as time goes on!

Let's revisit this in 12 months, shall we?

John.


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