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

To: Stock Farmer who wrote (58455)	3/12/2002 5:13:58 PM
From: RetiredNow	Read Replies (1) \| Respond to of 77400

I have several comments, which I'll make below, but I did tell you exactly what I excluded from operating cash flows to get to my adjust cash flows number in my first post. Here is my breakout of Q2 Adjusted Operating Cash Flows: 1/31/2002 shares used in fully diluted EPS 7.496 growth 2.6% dilutive effect of stock options 0.185 o/s shares 7.311 growth 0.1% Operating Cash Flows 2,007 less provision for doubtful accts 34 provision for inventory 26 tax benefits from employee stock options 6 restructuring costs - Net (gain) loss from investments 43 Adjusted operating cash flows 1,941 AOCF/share 0.26 Sales 4,816 AOCF/Sales 40% As to why reducing accounts receivable is a valuable corporate tool, I'm surprised again that I have to explain this to you. Cisco's number of days to collect receivables is VERY low compared to their competitors. I can't remember the exact figure so I haven't posted it here, but that very fact means that Cisco converts has a much better operating model that allows them to run circles around their competitors. Whether reduction beyond certain levels is sustainable is a valid point. However, working capital tends to fluctuate with sales and various other factors. When you are looking at 6 years and beyond like I am, then these fluctuations become white noise. I have taken a 6.5 year average, so it is safe to ignore fluctuations both up and down from quarter to quarter. Same thing with revenue deferrals, sometimes they are up, sometimes they are down. You need to mark for exclusion only those items that represent one time extraordinary events, not recurring items or insignificant fluctuations. The rest of your comments, I'll have to get back to, because I have to take off right now, but stay tuned. :)