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

To: Stock Farmer who wrote (47913)	2/5/2001 10:46:59 AM
From: The Phoenix	Respond to of 77400

John, Have at it. But if you look at FD's post you'll notice something quite obvious. Inventory didn't grow due to purchases or exhausting inventory - it grew because of sales. Now gee.... no wonder there is an impact to earnings. The point is that FD is suggesting increased inventory alone impacts earning but in his example it sales that is affecting inventory - not the purchase of or holding of inventory. What else would effect "ending inventory" if the begining inventory and purchases are unchanged? Seems to me the only thing is sales. So while FD is focused on "inventory" as a culprit what he is actually pointing to is sales. Why does margins go down - because in FD's second example he is giving away inventory for free. Okay.... let's move on. OG