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To: Joe Stocks who wrote (40003)	5/29/2002 10:16:37 AM
From: DanZ	Respond to of 53068

There are three reasons that Cisco would increase their reserves: 1. They already know of one of more doubtful accounts. 2. They are just being conservative during the economic downturn. 3. Some combination of the two. Reserves are just that: RESERVES. They don't mean that a company knows that they won't be able to collect that portion of their receivables. Conservative companies increase their reserves during economic downturns, but often increase them too much and reverse the transactions when the receivables are collected, or when the threat of not being able to collect them diminishes. Most companies reserve at least 5% of receivables, so I don't think that 7% is all that worrisome.