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Technology Stocks : Applied Materials No-Politics Thread (AMAT) -- Ignore unavailable to you. Want to Upgrade?

To: Nancy who wrote (12130)	11/18/2004 9:38:29 PM
From: Kirk ©	Read Replies (2) \| Respond to of 25522

If I am not mistaken, BWAC and maybe others are confused. Someone said the cash can be reinvested in new plant and equipment. Well, that is correct, but it would just show up on the balance sheet as another asset and stockholder equity would remain unchanged. If what was purchased had a long life, then it would be depreciated such that yes, the cash was spent TODAY but the expense would be "expensed" over the useful life of the asset, unless they get some tax benefits for accelerated depreciation. ON the balance sheet it shows as the cash being gone and the line item for plant an equipment increased by a similar amount. Tax law doesn't let you depreciate it all at once like a regular "expense" such as salary or utility bills so you have ot back the cash flow for expensing plant and equipment out of the cash flow statement. I think it all started over my comment that AMAT did a good think in growing its Stockholder equity but there was a 12% drain on what it could have gone up that went to insiders via stock options. If that $160M entitlement were given to us as a dividend rather than Splinter and his crew, then the stock would be more valuable to us. BWAC made a comment about cash flow but I have yet to be convinced there is anything missing from the stockholder equity analysis that I did. That sort of analysis, as far as I can tell, doesn't care if you have cash or equipment as long as the cash is in the shareholders balance sheet and not in the insiders pockets via option "entitlements." I didn't spend a long time on this post so I might not be that much clearer! LOL... but I hope it helps. Kirk