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

To: RetiredNow who wrote (58527)	3/15/2002 10:41:39 PM
From: Stock Farmer	Read Replies (1) \| Respond to of 77400

Mindmeld... go back to our little equation for Free Cash Flow (with adjustment for signs <ggg>) Earnings + Depreciation - Capex = FCF I have used Depreciation = Reported Depreciation You have used Depreciation = Reported Depreciation + Depreciation of In-process R&D Both of us have used Capex of 5,621 and "Reported Depreciation" of 5,265 (me) and 5,270 (you) - with our [edit: insignificant] differences being in '95, '96, and '99. Remember, we're supposed to be adjusting "actual" expenses versus "accounted-for" expenses and that over a long period of time they should balance. So if the company buys In-process R&D in year X and then depreciates it over years X+1 through X+n, we need to <add> back that depreciation and <subtract> the cost. You've done the add part. But not the subtract part. So there's a "hidden" capex going on. Care to guess what it is? I bet it's the same hidden capex that's also responsible for the mysterious 1.8 Billion missing from my computations which gives me an average 7% Free Cash flow to Revenue number!!! Man, price sucks if that turns out to be the case. John