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

To: BWAC who wrote (57325)	2/7/2002 10:12:13 PM
From: Stock Farmer	Read Replies (2) \| Respond to of 77400

issue of goodwill keeps coming up... why? Because if a company earns 6 billion dollars and then pees away 3 billion by over-paying for assets, it's worth the same as a company that earns 3 billion dollars, accumulates the same assets, and doesn't pee anything away. So when comparing "earnings per share", the issue of goodwill goes towards comparing "retained earnings per share". So when we have a valuation discussion based on EPS, goodwill is relevant (and confusing). No wonder the subject keeps coming up. If instead we have it based on the rate of appreciation of retained earnings in shareholder equity, well then goodwill becomes less relevant, and less confusing. John