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Technology Stocks : PSFT - 1997 Outlook [closed thread] -- Ignore unavailable to you. Want to Upgrade?

To: McNabb Brothers who wrote (561)	12/2/1997 1:29:00 PM
From: Melissa McAuliffe	Respond to of 940

Hank,<< we are looking at other things in their financials!>>Could you share what these other things are? Melissa

To: McNabb Brothers who wrote (561)	12/2/1997 2:01:00 PM
From: Chuzzlewit	Read Replies (1) \| Respond to of 940

Hank, what in the world could you possibly see in their financials? About the time that first quarter earnings were due to be reported there were a lot of bears talking about weakness in the balance sheet, particularly the current liabilities. But that was because they didn't understand the fact that the deferred revenues item is similar to the unearned portion of a magazine subscription. The balance sheet is quite healthy. If you were to strip away the deferred revenues item (along with the identical amount from current assets) you would see a current ratio of 2.06. There doesn't seem to be any liquidity item that I can identifiy. There is no debt. Here's what I see in the income statement: cost of services remaining flat at about 61%, operating income growing faster than sales, large increases in productivity in sales and marketing -- the ratio of revenues to sales and marketing expenses was 3.56 vs 3.23 for the 9 months ending Sept 97 and Sept 96, and the for G&A 18.17 and 16.91 for the same periods. This speaks to the fact that the average sale size is increasing. Have you guys liquidated your short position in Dell? Regards, Paul