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Technology Stocks : All About Sun Microsystems -- Ignore unavailable to you. Want to Upgrade?

To: Steve Lee who wrote (50584)	7/23/2002 12:43:05 AM
From: Elroy	Read Replies (2) \| Respond to of 64865

Gross margins, like pro forma are BS. If you think gross margins are BS you might as well just disregard the whole income statement. Gross margins are the best indicator of what the value add is each dollar of revenue. High gross margins means the value of the technology is much higher than the cost to put the product together. Virtually all leading technology companies have industry leading gross margins. The operating expense lines are dependent on current staffing levels which management can control, but the gross margin indicates pricing ability which, in order to be above industry averages, means the product has to be better than competitors' products (the customers are willing to pay more). If you think that's BS, go back to school. Elroy