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

To: Stock Farmer who wrote (63047)	2/10/2003 4:25:29 PM
From: rkral	Read Replies (3) \| Respond to of 77400

OT ... John, I need help re negative effective tax rates .. You arrived at Actual Pretax Compensation by dividing the Tax Benefit by the Statutory Corporate Tax Rate. (1) Was the statutory rate used to save time? IOW, did you just not want to take the time to look up the effective tax rate for each year? I'm assuming that's the case. Now the effective tax rate for FY01 was a negative 16% and the tax benefit was $1755 million .. thus yielding negative $11 billion in pre-tax compensation. That's ridiculous .. meaning the negative is ridiculous, not the size of the number. (2) IYO, what is the proper method when dealing with a negative tax rate? I'm having this strange feeling that one can't work backwards from an after-tax number to a pre-tax number when the effective tax rate is negative. An engineer/math type guy should know this, but this one doesn't. I'll try to reason it out. Ron